While the offer to supply liquefied natural gas (LNG) at $ 9.5 per unit to gas-based power projects of India Gas Solutions (IGS) is going to pose a tough challenge for the other players planning to set up LNG facilities on the Andhra coast, the question of feasibility is a matter power companies are still unclear about.

“It all boils down to how much price a merchant power producer can command at the exchanges if he has to run the plant with LNG that is procured at $9.5 per mBtu (million British thermal unit),” a senior official of a large private power company told Business Standard.