The government is likely to allocate 4.73 million standard cubic metres a day (mmscmd) of gas from the K-G Basin of Reliance Industries Ltd (RIL) to five power plants by the end of this week.
The additional allocation will be made even as the Anil Ambani-owned Reliance Natural Resources Ltd’s plea for quashing earlier gas sale purchase contracts is coming for hearing in the Supreme Court on September 1. “A request has come from the Ministry of Power to allocate gas to more power plants, which are in a state of readiness to receive it. We plan to finalise the allocation this week,” said a senior petroleum ministry official, adding that the allocation can be done even though the empowered group of ministers (EGoM) on the K-G Basin has not been reconstituted after UPA government was re-elected. “The broad guidelines for allocating gas are already there and focus will remain on priority sectors like power and fertiliser in future allocations,” he said.
The plants likely to get allocation are Lanco’s 366 Mw Kondapalli project, GMR Energy’s 220 Mw Tanir Bavi project, NDPL’s 108 Mw Rithala power project, Bawana power project (250 Mw) and Gujarat State Electricity Corporation’s 374 Mw Utran power project.
Most of these are scheduled for commissioning between November 2009 and March 2010. However, since commissioning activities begin three months before the formal date, gas will be required earlier.
RIL’s K-G basin, which started pumping gas this April, is currently producing 37-38 mmscmd of gas. By December, production is estimated to go up to 80 mmscmd. Peak output is estimated at 120 mmscmd. RIL had asked the government to government to make more allocations, so that it could raise output.
The government, on the basis of the gas utilisation policy, and through an EGoM constituted in this regard, made allocation of the initial 40 mmscmd of KG basin gas to various sectors.
Accordingly, 15 mscmd of gas was earmarked for the existing fertiliser plants, 18 mscmd to existing power plants, three mscmd to existing LPG plants and the remaining five mscmd for city gas distribution projects. The government has also fixed a price of $4.2 per mBtu for a five-year period beginning April 2009.