Half of Reliance Industries Ltd’s (RIL’s) KG-D6 additional gas production will go to the power sector. The Empowered Group of Ministers (EGoM), headed by Finance Minister Pranab Mukherjee, has finalised consumers for the 50 million standard cubic metres a day (mscmd) of gas that RIL would produce beyond the initial 40 mscmd for which customers had been decided earlier. The fertiliser sector has been allocated 15.3 mscmd out of the initial 40 mscmd gas production.
“The EGoM has allocated about 20 mscmd of gas on firm basis, while allocation of another 30 mscmd has been made on a fall-back basis,” Petroleum Secretary R S Pandey said after the EGoM meeting. The bulk of firm allocation has been made to the power sector (about 13 mscmd), followed by refineries (5 mscmd), petrochemicals (1.918 mscmd), steel (0.44 mscmd) and fertilisers (0.178 mscmd).
The EGoM also allotted gas to RIL for use in its refineries and petrochemical plants. A total allocation of 1.918 mscmd in petrochemicals will go to RIL, he said. He did not mention the exact allocation for RIL’s refineries.
“RIL will get its share on a pro-rata basis,” he said. RIL had demanded 20 mscmd.
In fall-back allocation, which is based on gas availability, the largest chunk has gone to the power sector (12 mscmd), followed by captive power generators (10 mscmd), refineries (6 mscmd) and city gas networks (2 mscmd). In the earlier allocation of 40 mscmd too, the bulk allocation of 18 mscmd had gone to power plants.
The increased allocation to various sectors will enable RIL to ramp up its production from the block and earn more revenues. RIL Director PMS Prasad had recently said the company was losing about $120 million every month by producing less than capacity.
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“With the additional allocation, we will be able to increase and maximise production for the benefit of all stakeholders. The additional allocation will also increase the overall customer base for supply of gas, thereby avoiding frequent changes in the production level from the block,” a RIL spokesperson said.
Pandey said: “Gas production from the K-G basin is expected to cross 60 mscmd by December and, thereafter, it will get ramped up to 80 mscmd. Once it stabilises at 80 mscmd, more firm allocations will be made. Instructions will go to the contractor (RIL) to enter into contracts with various consumers based on today’s decision.”