It will be Reliance Industries' gigantic gas find on the east coast versus the imported LNG offered by Oil and Natural Gas Corporation and Indian Oil Corporation in the tender for supply of gas to the 1400 MW power plant in Karnataka.

Only three -- RIL, ONGC-Petronet LNG combine and the consortium of IOC and Petronas of Malaysia -- remain in the fray for supply of gas to Karnataka Power Corp Ltd's 1400 MW combined cycle power plant at Bidadi, industry sources said in New Delhi.

GAIL (India) Ltd, which had put in an initial bid for the tender in July 2003, opted out as it sought an extension of the deadline to submit its quotation on March 24, the day final bids for the tender closed.

"Instead of submitting a final bid, GAIL placed a letter for extension of tender. KPC declined and decided to proceed with the bids of RIL, ONGC-PLL, IOC-Petronas, the only ones who submitted bids at the close on March 24," they said.

While RIL offered to supply 7 million standard cubic meters per day (mmscmd) of gas from its Krishna Basin deepwater block D6, ONGC-PLL offered 1.8 million tonnes of liquefied natural gas shipped from Qatar. IOC-Petronas offered LNG from South East Asia.

Though ONGC-PLL have indicated Kochi as the possible landing point of LNG from Qatar and then piping the regassified LNG to Bidadi, some 30 kms from Bangalore, the consortium has indicated it may put up the LNG import and regassification terminal at Mangalore to reduce the cost.

RIL, whose D6 block holds 14.5 trillion cubic feet of gas reserves that are capable of producing 40 mmscmd in three years, will lay a pipeline from Kakinada in Andhra Pradesh to Bangalore for the supply of gas.

So will IOC-Petronas combine, who in association with British Petroleum are building a LNG import terminal on Andhra coast, sources said.

They said GAIL, which along with ONGC, IOC and Bharat Petroleum Corporation Ltd is a co-promoter of PLL, opted out as it did not have a firm supply source and is now keen on joining the ONGC-PLL cosortium.

PLL has begun importing 5 million tonnes per annum of LNG from Qatar at the country's maiden Dahej LNG import terminal.

Karnataka Power Corp Ltd had in June 2003 come out with the tender for sourcing natural gas/re-gassified LNG for its 2x700 MW power plant at Bidadi.

"The three consortia in their final bids have indicated the terms and conditions for gas supply. KPCL will incorporate acceptable terms in its contract and then ask the three by the month end to submit price bids," sources said.

The first of the two 700 MW units is expected to be commissioned in 30 months and the second in 36 months from the zero date, which will be fixed after gas supplies are firmed up.

KPCL proposes to enter into a suitable power purchase agreement with bulk buyers like Power Trading Corporation, they added.