CMS Energy Corp. and the Aditya Birla Group of India said they have concluded a joint development agreement with the government-owned Power Trading Corp. of India on the $1.6 billion Ennore LNG and power project in Tamilnadu, India.
The agreement was signed Thursday in Washington, DC, during a state visit by Indian Prime Minister Atal Bihari Vajpayee.
Under the agreement, the Indian government has expressed its intent to support the payment obligations of the Power Trading Corp. of India, which will purchase the entire capacity of the 1,850 Mw Ennore power plant.
The Ennore project will consist of an LNG import, storage, and regasification facility that initially will bring in 2.5 million tonnes/year of LNG from the Ras Laffan Liquefied Natural Gas Co.(RasGas) in Qatar. The LNG terminal will provide natural gas to the Ennore power plant and a natural gas pipeline system designed to serve growing industrial centers throughout southern India.
The natural gas pipeline system will be developed, owned, and operated by Dakshin Bharat Energy Consortium (DBEC). DBEC was granted exclusive rights to develop, construct, own and, operate the project in December 1998, after an international competitive bidding process.
The joint development agreement includes a timetable with firm dates for key project milestones, as well as the Indian government's commitment to establish an effective payment security mechanism for the firm purchase of power from the Ennore plant. The announcement was made on behalf of project developer DBEC.
Members of the consortium and their ownership position include CMS, 26.67%; the Aditya Birla Group, 26.67%; Unocal Corp., 18.66%; Australia's Woodside Petroleum Ltd., 15%; and Germany's Siemens AG unit, Siemens Project Ventures, 13%.
"The joint development agreement is a strong endorsement from the Indian government regarding the attractiveness of the Ennore project and sets the stage for financial closure,'' said CMS Energy's Pres. Victor J. Fryling. He said the project will play an important role in India's continued economic development by helping alleviate India's power deficit.