AP seeks GAIL gas for existing power units

The Andhra Pradesh government has asked the petroleum and natural gas ministry to ensure that GAIL extends preference for distributing its additional gas to existing power projects in the state rather than upcoming new projects of independent power producers.

"The state government has conveyed to the petroleum and natural gas ministry that the gas supply to the four existing power projects of the state has been curtailed to 3.496 million cubic metres a day (MCMD) during April to November, 2005, as compared to 3.633 MCMD which was supplied during 2004," a government official told Business Standard.

The state government suggested in its letter that any additional gas to be supplied by GAIL must be allocated to the existing power projects against their firm allocations.

"It will be unfair on part of GAIL to allocate this gas to the new upcoming IPPs resulting in the curtailment of supply to the existing projects, in order to recover transmission charges from the new projects," the official added.

Due to the curtailment of supply, APTRANSCO had had to bear an additional financial burden of Rs 72.04 crore till November 2005.

The state government felt that the financial burden was unjustified since GAIL agreements with the existing power projects spelt out a firm allocation of 3.90 MCMD.

"The state requires 4.1 MCMD of gas supply for its four existing gas-fired power projects," the official said.