August 13, 2013 / 7:38 AM / 4 years ago

India's state utility NTPC issues 7 tenders to import 5 million tonnes of thermal coal

NEW DELHI, Aug 13 (Reuters) - India’s state utility NTPC has issued seven tenders to buy a total 5 million tonnes of imported thermal coal, a company official said. The imports will bridge a shortfall in local supplies that it expects in the year to March 2014.

Coal fuels more than half of India’s power generation, but domestic production has not kept up with demand from the power sector, leading to power cuts that crimp growth and result in costlier imports.

NTPC, India’s top power producer with an installed capacity of 41,184 megawatts, requires 178 million tonnes of coal in this fiscal year to fuel its generators, said the official, who did not wish to be identified.

It expects to source 145 million tonnes of coal locally, signing agreements with miner Coal India Ltd, which produces around 80 percent of the country’s coal.

“We plan to import 16 million tonnes of coal in 2013/14, which works out to around 28 million tonnes equivalent after adjusting for the higher energy value of imported coal,” said the official.

India produces mostly low-grade thermal coal with high ash content and about 70 percent of the fuel that Coal India produces has an energy value of 4,300 KCal/kg or lower.

The tenders are NTPC’s first in this financial year that began on April 1.

NTPC had a similar import requirement in 2012/13, but shipments of 7 million tonnes, contracted late last fiscal year, have only been delivered since April, the official said.

For the current tender, only those shipments with below 32 percent moisture, 20 percent ash and 0.90 percent sulphur, with gross calorific value in the range of 5,300-5,800 Kcal/kg would be considered, the tender document on its website showed.

“The last date for submission of bids is on Sept. 6,” the official said.

Successful bidders will need to deliver the coal from port to several NTPC power stations spanning across the country, the official said.

NTPC said it expected the successful bidders to supply the coal within four months of the power producer issuing the delivery schedule.

India’s coal imports in this fiscal year could hit 165 million tonnes to meet the local supply shortfall, another record after total imports crossed 135 million tonnes in 2012/13. (Reporting by Malini Menon; Editing by Michael Perry)

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