The much-awaited meeting of the petroleum and power ministries officials and Reliance Industries (RIL) for the allocation of gas from the Krishna-Godavari (KG) basin is slated to be held in Delhi later this week.
“A meeting will be held this week to lay out a definite plan with regard to the allocation of the KG basin gas to companies. Power companies in Andhra Pradesh will get priority,” said R S Pandey, petroleum secretary.
As per the gas utilisation policy — which producers are to follow — fertiliser and power units get first priority for the allocation of gas.
The Andhra Pradesh government has requested the Ministry of Petroleum and Natural Gas to allot most of the gas to the state so that it can meet its growing power demand.
“We have requested the ministry to allot most of the gas to the power firms. The Andhra government has asked for around 9 million metric standard cubic metres per day (mcmd) of gas, which is half the capacity of what RIL will produce by March-April,” an official from the Andhra Pradesh Power Generation Corporation (APGenco) said.
The empowered group of ministers had earlier decided that while power plants in Andhra Pradesh will be provided the gas to run at 70 per cent PLF (plant load factor), others will get gas for 60 per cent PLF.
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“GVK Power and Infrastructure (GVKPIL) has approved the draft agreement with RIL. Only signatures are pending. There has been no further communication with RIL,” Issac A George, chief financial officer of GVKPIL told Business Standard.
However, Ratnagiri Gas and Power Private (RGPPL), which is also said to be on the priority list of the government, has not had any dialogues with RIL. RGPPL needs 2.3 mcmd gas annually to meet its full capacity of 2,150 MW.
According to government sources, around 20 companies, including Nagarjuna Fertilizer & Chemicals, Chambal Fertilizers & Chemicals, Tata Fertilizers & Oswal Chemicals & Fertilizers, will get gas from RIL.
Power and fertiliser plants consume 70 per cent of the gas available in the country. However, inadequate supply of gas forces them to operate at 50-60 per cent of capacity.
RIL will begin gas production from its D6 block in the eastern coast of KG basin in late February. While the initial production from the block is likely to be around 18 mcmd, it is likely to be ramped up to 80 mcmd within a year.
(With inputs from B Krishna Mohan in Hyderabad and Sudheer Pal Singh in New Delhi)