Even as hectic preparations are on to tie up several loose ends, indications are that Indian Farmers Fertiliser Cooperative (Iffco), National Thermal Power Corporation (NTPC) and a host of other industries are keen to get gas supply deal from the LNG project, it is learnt.

Tamil Nadu Industrial Development Corporation (Tidco) sources said there was good scope to enhance the capacity of the proposed LNG terminal from 1.9 million tonnes per annum to 5 million tonnes per annum in view of the interest shown by several user industries.

Iffco is putting up a 7.5 lakh tonnes per annum capacity urea plant at Nellore in Andhra Pradesh. The project estimated to cost around Rs 1,670 crore is awaiting clearance from Public Investment Board (PIB). The company has already acquired 1200 acres of land for the urea project.

Iffco sources told The Financial Express that the company is keen on getting gas supplies from the Ennore LNG terminal project for the Nellore urea plant and it will bear the cost of the pipeline from Ennore to Nellore for transportation of the gas.

NTPC which is putting up a 1500mw power plant at Cheyyur is also stated to be ready to use LNG as feedstock for its power plant. Negotiations are on between NTPC and Tidco to seal gas supply arrangements.

Sources said there was much uncertainty surrounding the integrated LNG-cum-power project as the ministry of surface transport (MoST) had yet to give clearance for the second phase expansion of the Ennore port project. The establishment of the LNG terminal and the power plant with a capacity of 1866mw will entirely depend upon how soon Ennore port expansion is cleared and put through.

It may be recalled that concerned at the delay in the clearance for the expansion of the Ennore Port the Tamil Nadu government had urged MoST to move with speed for clearing the LNG-cum-power project so as to give an accelerated thrust to the industrial development of the state.

While clearance from MoST is still awaited, Tidco sources are proceeding on the assumption that it will come soon and the project as originally expected will see financial closure by end of this year and it will go on stream by year by year 2003.

Apparently Siemens-led consortium which has been selected to execute the project has begun power purchase agreement (PPA) negotiations with Tamil Nadu Electricity Board (TNEB). There has been no final decision taken by the state government on earmarking a portion of sales tax revenues as escrow arrangement for the LNG-power project. Various options are still being explored for the escrow mechanism and for payment support and guarantees.For gas supplies Siemens it is said about to conclude the seller-purchaser agreement for gas offtake from Qatar.

Sources said two comprehensive studies were going on about Ennore port expansion and the state government has already expressed its concern on the delay in port expansion. The Chennai Port Trust the executing authority for the Ennore Port project has in principle agreed to accommodate requirements of Tidco in lay-outs and locations plan which is expected to be finalised soon.