US company Enron and the Kannur Power Project Ltd. (KPPL) have signed an agreement for a 513 MW power plant in Kannur. Enron will hold a 74 per cent stake in the project and KPPL the remainder.

South Korean company Hyundai will build the plant under an engineering, procurement and construction contract. The power station will comprise three 112 MW gas turbines and a 177 MW steam turbine, all to be supplied by GE.

The plant is expected to cost $402 million. The project has already secured commitments worth $280 million from international bankers.

The plant will initially burn naphtha but will switch to natural gas when this becomes available. Enron has signed a preliminary agreement to develop a LNG facility near Azhikkal which could supply the plant.