CMS Energy and Aditya Birla Group announce agreement with Indian government for major power and LNG project
The following news release was issued by CMS Energy Corporation
DEARBORN, Mich., Sept. 14, 2000 -- CMS Energy Corporation and its co-lead developer, the Aditya Birla Group of India, today announced the conclusion of a Joint Development Agreement (JDA) with the Power Trading Corporation of India on the $1.6 billion Ennore Liquefied Natural Gas (LNG) and Power Project in Tamilnadu, India. The Joint Development Agreement includes a timetable with firm dates for the achievement of key project milestones, as well as the Government of India's commitment to establish an effective Payment Security Mechanism (PSM) for the firm purchase of power from the 1,850 megawatt Ennore plant. The announcement was made on behalf of the Dakshin Bharat Energy Consortium, which is developing the project.
The Joint Development Agreement was witnessed by the U.S. Commerce Secretary, Mr. Norman Mineta, and the Indian Finance Minister, Mr. Yashwant Sinha, at a signing ceremony in Washington, D.C. during the official state visit of the Indian Prime Minister, Mr. Atal Bihari Vajpayee.
The Dakshin Bharat Energy Consortium (DBEC) was granted exclusive rights to develop, construct, own and operate the project in December 1998, after an international competitive bidding process. The Ennore project will consist of an LNG import, storage and regasification facility that initially will bring in 2.5 million tons per year of LNG from the Ras Laffan Liquefied Natural Gas Company (RasGas) of Qatar in the Arabian Gulf. The LNG terminal will provide natural gas to the 1,850 MW Ennore power plant and a natural gas pipeline system designed to serve growing industrial centers throughout southern India. The natural gas pipeline system will also be developed, owned and operated by DBEC.
Under the terms of the Joint Development Agreement reached today, the Government of India has expressed its intent to support the payment obligations of the Power Trading Corporation of India, which will purchase the entire capacity of the Ennore power plant. The Power Trading Corporation is 100 percent owned by the Government of India and was formed in1998 to establish and operate a responsive and efficient power trading system throughout India.
"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.
Ennore will play an important role in India's continued economic development by helping to alleviate India's power deficit through delivery of cost-effective, safe, reliable and environmentally- friendly power to the people of India," said CMS Energy's President and Chief Operating Officer Victor J. Fryling.
"By identifying long-term, cost-competitive projects like Ennore and backing them through the Power Trading Corporation, the Indian Government has displayed the commitment and sense of purpose that will firmly establish the role of the private sector in the energy industry in India," said Mr. Dev Bhattacharya, President, Corporate Strategy and Business Development for the Aditya Birla Group.
The Dakshin Bharat Energy Consortium was formed in 1997 to bid for, develop, own and operate the Ennore LNG terminal and Power Project and consists of: CMS Energy Corporation of the USA (26.67 percent ownership), the Aditya Birla Group of India (26.67 percent ownership), Unocal Corporation of the USA (18.66 percent ownership), Woodside Petroleum of Australia (15 percent ownership) and Siemens Project Ventures of Germany (13 percent ownership).
CMS Energy Corporation has annual sales of more than $6 billion and assets of about $15 billion throughout the U.S. and around the world with businesses in electric and natural gas utility operations; independent power production, LNG terminaling operations; natural gas pipelines, gathering, processing and storage; oil and gas exploration and production; and energy marketing, services and trading.
Updated: September 2000