“The company is working on as to where to locate the new facility — in Chennai, Tamil Nadu or at Bhiwadi, Rajasthan. A decision to this effect will be taken by March-end,”  B. Santhanam, Managing Director, Saint-Gobain Glass India said.

The capacity of the new plant is expected to be around 500 MW a year. The company’s second glass plant in the country, being built with a budget of Rs 1,500 crore, is fast coming up at Bhiwadi, Rajasthan. “The Bhiwadi plant is being taken up in phases. In phase-I, Rs 900 crore is being invested to create new production lines and is expected to be commissioned by December 2011,” Santhanam added.

“The phase-II has a budget of Rs 600 crore and will be taken up based on the capacity utilisation of phase-I,” he added.
When the second plant is commissioned at Bhiwadi, the company plans to sell 60 per cent of the glass produced in the domestic market.

The company is also planning to upgrade the Chennai plant. “From 2000 to 2010, we have spent nearly Rs 1,600 crore and a few machines need to be replaced. Also, as part of expansion, we plan to add a specialised glass centre,” said  Santhanam.

Business Line

ONGC, which is paying 100 per cent royalty to the government on oil produced from the Cairn India operated Barmer block in Rajasthan, has been wanting the government to split the royalty payments with Cairn India.

Total royalty payment over the life of the block is likely to be around $2 billion. Sharma said ONGC won’t continue to pay a 100 per cent royalty on the Rajasthan oilfields.

The power unit will be a subsidiary of the group’s listed entity, Konark Synthetics, which is into yarn and garments.  Konark has received an allocation of 5 Mw in Gujarat.  Land has been identified in Kutch and the company has signed a 25-year power purchase agreement with the Government, which has assured Rs 15 a unit for the first 12 years and Rs 5 a unit for the next 13 years, said Shonit Dalmia, Director, Konark Group.

Dalmia said the State has also promised to back the PPA with a letter of credit. The project is expected to be completed this year-end with the use of imported thin film technology.

Konark has also tied up with the Rajasthan Government for 50 Mw of solar power generation. About 410 acres near Jodhpur has been allocated by the State at 10-20 per cent of the ready reckoner value as an incentive to attract the investment. Land will cost no more than Rs 2 crore, said Dalmia. The State has also accorded an evacuation certificate to Konark for 50 Mw, as a comprehensive legislation for renewable energy is awaited.

“We are committed to becoming a renewable energy IPP and are deploying international technology partners for engineering, procurement and construction (EPC). We are also in advanced stages of finalising wind power projects with installations in the southern and western parts of India,” he said.

Wind farms in Tamil Nadu

Efforts are on to set up wind farms in Tamil Nadu. A consultant has been appointed and his proposal is awaited. “The target is 45-50 Mw and we are confident of commissioning 10 Mw of wind power along the Tamil Nadu coastline in the 12-15 months,” he said.

The Konark Group is looking at a 25:75 equity debt ratio for the Rs 1,000 crore renewable energy initiatives. For the Rs 250-crore equity part, the promoters intend to invest Rs 150 crore from cash accruals of the group and would try to source the balance from private equity funds.

Over the past few months, the group has been evaluating the potential in the power sector and is now bullish on the future prospects of the renewable energy generation. In the first stage, the group plans to set up infrastructure to generate power through solar and wind energy projects. The group has already submitted proposals to Gujarat, Rajasthan and Maharashtra to begin operations in the sector.

 Dalmia said, “The power industry represents an important opportunity for the group and we are committed to becoming a renewable energy IPP. We are executing solar energy projects in Gujarat & Rajasthan by deploying international technology partners for EPC. We are also in advanced stages of finalising wind power projects with installations likely in the southern and western parts of India.”

Konark expects the power division to substantially add to its turnover over the next few years. The group is also exploring opportunities to generate power through other clean-tech models.

Business Line

The project, being set up in the Bikaner region in Rajasthan, is expected to be commissioned within the next 28 months. It will be implemented by Rajasthan Sun Technique Energy Pvt Ltd, a subsidiary of Reliance Power.

This is the company’s maiden solar power project and one of the country’s largest. Reliance Power is trying to set up 37,000 Mw, the largest capacity addition in the country’s private sector. Reliance Power won this project in rate-based competitive bidding under the government’s Jawaharlal Nehru National Solar Mission (JNNSM).

The government plans to set up 1,100-Mw solar plants by 2013, under the mission’s first phase.

Two months ago, the government had allocated 650-Mw solar projects based on grid-based power and another 150 Mw for non-grid on tariff-based competitive bidding, said sources.

Other companies that have been sanctioned to set up 100-Mw solar plant at Jaisalmer in Rajasthan include Hyderabad-based Lanco Infratech and KVK Energy Ventures. Godawari Power and Ispat, and Corporate Ispat Alloys Ltd have also got the nod to set up 50-Mw plant each at Jaisalmer.

Each project would cost about Rs 12-14 crore per Mw, said sources.  NVVNL is the designated nodal agency for procuring solar power by entering into PPAs with solar power developers under the Solar Mission.

Anil Ambani, chairman of Reliance Power, had announced plans to set up solar power plants of 600 Mw during the company’s annual general meeting last year.

Reliance Power was planning to use advanced concentrating solar thermal technology to achieve a 32 percent capacity utilisation factor, the highest among all companies who had signed agreements with NVVN, said officials with Reliance Power.

During the recent visit of US President Barack Obama to Mumbai, the Export-Import Bank of the US and Reliance Power had signed a memorandum of understanding (MoU) on providing US $5 billion in financial support to Reliance Power for the purchase of US goods and services to be used in the development of up to 8,000 Mw gas-fired electricity generating units and up to 900 Mw renewable (solar and wind) energy facilities.

The Nuclear Power Corporation of India Limited (NPCIL) on Monday began construction on a state-of-the-art, indigenously designed nuclear power plant unit in Gujarat with pouring in of the concrete at the site.

The 700-MW PHWR, which is the latest state-of-the-art nuclear power reactor, has been designed by NPCIL by scaling up its 540-MW PHWRs (TAPS-3 and -4), which have been successfully operated at Tarapur, near Mumbai, since 2005. NPCIL has launched four indigenously designed 700-MW PHWRs, two each at Kakrapar in Gujarat and Rawatbhata in Rajasthan.

These reactors are slated for commercial operation in 2015 and 2016, respectively. Currently, NPCIL operates 19 nuclear power reactors with an installed capacity of 4,560 Mw.

With the first pour of concrete, KAPP-3 and -4 also have joined three other NPCIL reactors that are in an advanced stage of construction, raising the under construction capacity from 2,220 Mw to 3,620 Mw.

The excavation for another pair of 700-Mw PHWRs, RAPP-7 and -8, at Rawatbhata in Rajasthan, is also in an advanced stage, and the first pouring of concrete is expected by March 2011.

NPCIL’s installed capacity will reach to 9,580 Mw by 2016, with the progressive completion of the nuclear power reactors under construction.

NPCIL hopes to reach 20,000 Mw or more by 2020 and play a major role in reaching country’s installed nuclear power capacity of 63,000 Mw by 2032, by setting up nuclear power reactors based on indigenously designed 700-Mw PHWRs and light water reactors of 1,000 Mw or larger, based on international technical cooperation.

The consortium of financial institutes led by Standard Chartered will finance the deal to the extent  of US $6 billion and Standard Chartered’s exposure in the deal will be to the extent of US $2 billion.

The total deal is pegged to be around US 9.6 billion. Bankers involved in the financing process have been working closely with the management of Vedanta Resources to finalise loan documents and to create security for disbursement of the loans. The loans will be a combination of short-term and long-term financing, said the people who are a part of the negotiations between the company and banks.
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Banks that have also committed funds to Vedanta include JP Morgan, which could provide as much as US $1 billion; Barclays, Royal Bank of Scotland and Citigroup. A couple of other banks are also scheduled to join the syndicate, though with small-ticket financing, according to the people involved in the finalisation of the negotiations.

Economic Times

Interest of international investors in the India’s exploration and production (E&P) industry might get affected if the government unduly delays the deal between Cairn Energy and Vedanta Resources, warned Bill Gammell, chairman of Cairn Plc, the BRitish parent of Cairn Energy India.
In  a joint press conference along with Vedanta Resources’ chairman, Anil Agarwal, Gammell said: “Oil companies have the opportunity to invest anywhere in the world. The process should take its natural course, but it has to have a timeline. India should be a destination for investments and if there are delays, it doesn’t help India.”

Union petroleum secretary, S Sundarehsan, however, said, “We still have two-and-a-half months to decide on the deal. That should be a fair enough time.”

Gammell’s statement, which can be taken as a veiled threat, comes at a time when the government is about to launch the ninth edition of its New Exploration and Licensing Policy (Nelp-IX) with a roadshow in Mumbai early next week.  The government intends to offer 34 oil and gas fields. Last year, it got bids for just 36 of the 70 blocks on offer, due to the pricing dispute over KG D6 gas and the global financial meltdown.

Gammell later said he hoped the government’s approval will come by the end of this year, something echod by secretary S Sundareshan also said in New Delhi.

Cairn India holds stakes in 10 oil and gas blocks in India. Its key asset is the oil block in Barmer in Rajasthan. The production there of 125,000 barrels a day accounts for about 17 per cent of India’s total crude output. Cairn India has a 70 per cent stake in the block and Oil and Natural Gas Corporation (ONGC) holds the rest.

No change in Vedanta’s offer price

Replying to a question Anil Agarwal clarified that Vedanta has no intention of hiking the open offer price for minority shareholders. He said, “Our Rs 355 per share price is final and it’s a good price and we don’t intend to hike it. The Rs 50 premium which Cairn Plc is being offered is to sign a no-compete agreement.”

This August, the UK-based Vedanta Group agreed to buy 51 per cent stake in Cairn India for around US $9.6 billion. Cairn Energy has 62.36 per cent stake in its Indian unit. The LS E-listed Vedanta Resources has raised a debt of US $6.5 billion from a consortium of banks.

If Vedanta has to give a matching offer to minority shareholders it will have to shell out an additional Rs 3,570 crore.

The first stretch of 670 kilometer Barmer-Bhogat pipeline has now commenced commercial operation with the sale to private refinearies, informed press communiqué issued by the Cairn India.  The sale of crude to IOC through the pipeline is also expected to commence soon. Production is currently 60,000 barrels of oil per day (bopd).

The completion of the pipeline and related infrastructure allows the JV to sell crude to the refineries in order to gradually increase both production and sales. Pipeline sales are expected to reach 125,000 bopd in the second half of calendar year 2010 and sales arrangements with four buyers are now being put in place for 143,000 bopd.

Cairn, at present, trucks crude to Jamnagar for sale to RIL and to Kandla for onward shipment to the Mangalore Refinery.  The pipeline would help bringing down the transportation cost from US $6 to US $7 per barrel to about US $1 per barrel.

A committee headed by former petroleum secretary S C Tripathi, which was asked by the Rajasthan government to go into the possibility of setting up a refinery at Barmer, following Cairn India’s oil discoveries, has suggested the setting up of a 4.5-6 million tonnes refinery that may be raised to 9-12 million tonnes in the future.

The project would not be viable in a country that already has surplus refining capacity without fiscal incentives, the expert group said in its report submitted this month.

Rajasthan government has been pressing for a refinery at Barmer after Cairn found 6.5 billion barrels of reserves that can produce up to 240,000 barrels per day (12 million tonnes a year) of oil at plateau.

ONGC is, however, not keen on the project unless the state government defers local sales tax or extends an interest-free loan of Rs 1,300 crore per year for 16 years, gives free land and water, exempts crude oil from entry tax/cess/octori and central sales tax is waived for 16 years.

SBI Caps, which also went into the viability of the project, also suggested an interest free loan of Rs 1,200 crore per year for 16 years to ONGC, the committee said.

Besides fiscal incentives, the project cannot be viable without a “bankable and legally enforceable” tie-up with retailing firms for sale of fuel produced at the refinery.

It said the fuel retailers are not willing to off take fuel like diesel produced at the unit unless a five per cent discount in price is given to make up for the loss they would have to incur on diverting products they already sell in the state.

“Government of Rajasthan can also bear the liability of 5 per cent discount on the refinery price to be given to oil marketing company for the purpose of marketing tie-up by giving equal amount of sale tax/VAT relief on year to year basis,” it said. “Alternatively, this discount can be in the form of interest free loan or grant.” The central government should give at least 50 per cent relief in excise duty on the products for at least five years, it said.