UPDATE 2-India's NTPC net up 4pct, to double coal imports

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By Nidhi Verma

NEW DELHI, April 10 (Reuters) - NTPC Ltd (NTPC.BO), India's top power producer, posted a 4 percent rise in full-year provisional profit on Thursday and said it would double coal imports in 2008/09 to feed its expanding capacity.

State-run NTPC, which has a generation capacity of 29,144 megawatts (MW), plans to add 22,430 MW by 2012 and take the total to 75,000 MW by 2017.

The firm will shortly issue a tender to import 5 million tonnes coal for the financial year that began on April 1 as it seeks to add 2,360 MW of capacity this year, Chairman and Managing Director T. Sankaralingam said.

Rising coal prices was a concern and NTPC aims to meet a fifth of its fuel needs in the next few years from its own local mines, he said.

NTPC, which currently buys from state-owned Coal India Ltd, will begin production of about 1-1.5 million tonnes of coal from its mine in the eastern Indian state of Jharkhand this year, Sankaralingam said.

"In the next 5-6 years our own production will be 40-45 million tonnes, about 20 percent of our requirement," he said.

In March, Merrill Lynch said contract prices of thermal coal in Asia may rise by as much as 200 percent after weather-related supply disruptions in Australia, China and South Africa.

India and China will lead a 73 percent leap in world coal demand to 4,994 million tonnes of oil equivalent by 2030 from 2,892 million tonnes in 2005, the International Energy Agency said in late 2007.

Sankaralingam said the high prices were a concern but that would not hurt NTPC's earnings much because it imports only about 3 percent of its coal requirement.

He said the company would spend 135.88 billion rupees ($3.4 billion) as capital expenditure in 2008/09.

NTPC said it made a provisional net profit of 71.3 billion rupees for the year ended March 31, up from 68.6 billion rupees a year earlier. Its shares ended down 0.9 percent at 186 rupees in a Mumbai market that fell 0.6 percent.

NTPC generates most of its power from coal and will need 126-130 million tonnes in 2008/09, compared with 122 million tonnes a year earlier, Director of Operations Chandan Roy said.

Sankaralingam said NTPC had an average 10 days of coal reserves at its power plants, compared with a required level of 15 days.

NTPC is also looking to buy fuel from the Middle East and Africa, both on spot and long-term deals, Roy said, to make up for a shortfall in gas supplies.

The utility, which has a gas-based capacity for 3,605 MW, needs 17 million standard cubic metres of gas per day to run at 90 percent capacity but got only 11-12 mmscmd, he said.

NTPC hopes to sign a deal with Nigeria to annually import three million tonnes of liquefied natural gas and build a power plant in the African country.

"We are very confident it will happen in the next six months," Sankaralingam said.

NTPC is also scouting for exploration and production assets overseas, he said, without elaborating.

Roy said NTPC was in talks with Indian state-run oil firms such as Oil and Natural Gas Corp (ONGC.BO), Indian Oil Corp (IOC.BO) and unlisted Gujarat State Petroleum Corp to bid for oil and gas blocks offered in India's latest auction.

"We will bid for onland and shallow water blocks," he said. ($1 = 40 rupees) (Reporting by Nidhi Verma)