Siasian Energy Ltd had already entered into an MoU with Petronet for the supply of 200 million cubic metre of gas per day for its 1,200 mw Vypin Power Project to be set up in Kochi. Sources in KSEB said the agreement for the supply of LNG was signed between the chairmen of two companies a couple of days back in New Delhi. According to the agreement, Petronet will supply 6,41,000 tonnes of LNG to the power company per year. The liquefied gas will be transported to the power company through a dedicated pipeline to be laid later. The LNG will be regassified at the power project.

KPPL is the second power project in the state to sign FSA withPetronet LNG. Earlier, Vypin Power Project Ltd, promoted by the Siasian Energy Ltd has signed an MoU with the pipeline company for the supply of 200 million cubic metres of gas per day. While, the Vypin Power could wheel the LNG easily as the two projects lies adjacent to each other, Kannur Power has to wheel the gas by laying pipelines running to over 300 kms. This may push the cost of power to be generated in KPPL a shade higher. The two-part tariff allows the IPPs to pass the fuel cost onto the buyers.

Besides Siasin and KPPL, the FACT had also signed MoU with the public sector pipeline company for the supply of gas. FACT will shift the fuel base of its ammonia plant from naphtha to LNG once the terminal becomes operational.