In line with the Mumbai high court direction, the Union government will be informing users of gas from Reliance Industries’ D6 field in the Krishna-Godavari (KG) basin that supply would be available to non-priority sectors only after requirements of the priority ones — fertiliser, LPG, power and city gas distribution — are met.
It is expected to take a similar stand at the Mumbai and Delhi high courts, where Welspun Maxsteel, Ispat Industries and Essar Steel have challenged the petroleum ministry’s decision to divert KG-D6s supply from steel and petrochemicals to power and fertiliser.
The matter will come up for hearing at the HC in Mumbai on Monday and the Delhi HC on Tuesday. “There is no change in our stand,” said a ministry official. “Gas has to be given to core sectors on priority.” According to the directions of the Mumbai HC, the ministry had called a meeting of the companies affected by the cut in gas supply.
After output from the country’s biggest gas producing block dropped 20 per cent, the ministry directed RIL in end-March to first meet the demand of priority sectors such as fertiliser and power. If any gas is left, it should be supplied to the non-priority sectors such as steel, petrochemicals and refineries on a pro-rata basis. RIL, accordingly, cut supply to steel, petrochemical companies and refineries.
Reliance has signed customers for 60.76 mscmd of gas, while production is less than 48 mscmd. The government had accorded top priority to fertiliser plants, followed by LPG extraction units, power plants and city gas distribution projects in allocating KG-D6 gas.
Sixteen fertiliser plants have been allocated 15.35 mscmd of KG-D6 gas on a firm or permanent basis, while 27 power plants in the public and private sectors were allocated 29 mscmd. A sizeable 7.79 mscmd has been signed up with steel producers, while LPG plants have got 2.59 mscmd. Refineries, including that of RIL, have been allocated 3.46 mscmd, city gas projects 0.65 mscmd and petrochemical plants the balance 1.92 mscmd.
