OREANDA-NEWS. June 22, 2011. State-owned gas utility GAIL India said it has signed an initial agreement to evaluate the possibility of setting up two gas-fired power plants in Uttarakhand. GAIL said it has signed "a Memorandum of Understanding with Uttarakhand Jal Vidyut Nigam Ltd for evaluating the potential of setting up a gas-based combined cycle power plants in Haridwar and Kashipur in Uttarakhand under the joint venture route."

The pact was signed by GAIL Director (Business Development) S Venkatraman and UJVNL Managing Director G P Patel , the company said in a statement here. Uttarakhand is facing a power shortage and no new hydro plant is coming up due to environmental issues. To improve the availability of power in the state, UJVNL intends to set up 300 to 500-MW gas-based power plants at Kashipur and Haridwar.

"As per GAIL's assessment, there is a demand potential of 4.5-5 million standard cubic metres per day of gas in Uttarakhand," the statement said. Looking at the demand potential in Uttarakhand, GAIL is currently executing two pipeline projects -- the 182-km-long, Rs 239 crore Karanpur-Moradabad-Kashipur-Rudrapur pipeline and the 170-km-long, Rs 255 crore Saharanpur-Haridwar-Rishikesh- Dehradun pipeline -- to transport gas to consumers in the districts of Kashipur, Rudrapur, Roorkee, Haridwar and Dehradun.

"GAIL and UJVNL propose to set up around a 350 to 500-MW gas-based power plant each at both places to meet the power requirement of the state," the statement said. Natural gas required for both power plants will be supplied by GAIL. As per current Central Electricity Authority (CEA) guidelines, allocation of domestic gas for new power projects will be considered to the extent of only 60 per cent of the total requirement, subject to meeting specified criteria and gas availability. As such, for the balance volume, these plants have to depend on other sources. GAIL will source liquefied natural gas ( LNG )) from overseas to supply to these plants, it added.