New Delhi, March 26 (IANS): The Cabinet Committee on Economic Affairs on Wednesday approved the import of liquified natural gas for supply to gas-based power plants stranded due to a shortfall in the production of domestic natural gas in the country.

"In order to revive these stranded gas-based plants, the mechanism envisages importing Regasified Liquified Natural Gas (RLNG) for supply to these plants so that they can generate power," a cabinet communique said.

"GAIL and GSPL (Gujarat State Petronet Limited) will be permitted to import gas by purchasing on a spot basis from the international market and supply to companies, who can bid for this gas depending on their requirements," Power and Coal Minister Piyush Goyal told reporters here after the CCEA meeting.

"The bidding process will be reverse bidding, where companies can bid for this gas for upto 30 percent of their plant load factor (PLF), " he added.

Explaining the reverse bidding to keep down power tariffs, Goyal said: "We could start the bidding at around Rs.5.50 a unit and then see if we can go lower depending on the international gas prices."

The statement said that gas transporters and re-gasification terminals have agreed to reduce their transportation tariff, marketing margin and re-gasification charges on the incremental RLNG and power developers would completely forego the return on their equity.

"The government also proposes to provide support to discoms from the Power System Development Fund (PSDF) through a transparent reverse e-bidding process. This will make the cost of power affordable," it added.

With this arrangement, electricity generation in the country would be enhanced significantly by around 79 billion units, valued at about Rs.42,000 crore.