In a major reversal of policy, the government is likely to consider on November 10 reserving scarce domestic natural gas for power plants that claim to be built by March 2012 but whose schedule is subject to several conditions.
The government has till now maintained that scarce domestic gas cannot be reserved for anyone and only those customers who are ready to receive the fuel have been allocated gas from Reliance Industries eastern offshore KG-D6 fields. This was also its stand in the Supreme Court in the Ambani gas dispute.
An Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee is likely to consider allocating gas from KG-D6 and other fields to plants, including Anil Ambani Group firm Reliance Power's Samalkot expansion project, a government official said.
Samajwadi Party leader Mulayam Singh has already written to the Prime Minister Manmohan Singh seeking allocation of gas to greenfield or new power projects.
The official said the EGoM had at its last meeting on July 28 asked Central Electricity Authority (CEA) to give completion report for seven projects including 2,400 megawatt Samalkot plant in Andhra Pradesh.
CEA in its report stated that commissioning of these projects in the 11th Plan (ending March 2012) was "subject to contractual and erection schedule being adhered to by the suppliers and the developers and real assessment can be made only after substantial work has been done on the ground".
It included two additional projects and said "commissioning of all nine projects (including Samalkot project) that have placed the order recently (for equipment) and claimed commissioning within the 11th Plan (2007-12) can be assessed with high degree of certainty, by site visit 2-3 months before actual commissioning date."
The nine projects, all in private sector, are merchant power plants which are built by promoters on commercial risk/reward.
None of the public sector projects, in the Central or state sector like Puducherry government's Yanam project, Andra Pradesh's Karimnagar project, Maharashtra government's Uran plant or BHEL's Latur joint venture project.
The official said CEA, which had in a September 29 letter certified commissioning of 1,200 Mw capacity at Samalkot by March 31, 2012, last month changed the recommendation to say all the 2,400 Mw capacity will come up in 11th Plan and 9.6 million standard cubic meters per day (mmscmd).
"A list of six plants has been forwarded by the Power Minister with a combined requirement of 15.59 mmscmd of gas," he said.
Another nine plants including Anil Ambani Group's 2,400 Mw Samalkot expansion project in Andhra Pradesh has been placed in a separate list for which Power Ministry cites CEA recommendation to demand gas.
EGoM will consider allocating 4.67 mmscmd to 1,500 Mw Bawana project in national capital, 3.08 mmscmd to Lanco's 770 Mw Kondapalli expansion project in Andhra Pradesh, 3.07 mmscmd for GMR's 768 Mw Vemagiri expansion project in Andhra Pradesh, 2.62 mscmd to 702 Mw Pipavav project in Gujarat, 1.31 mmscmd to 351 Mw Hazira unit of Gujarat State Electricity Corp and 0.84 mmscmd for 225 Mw Kashipur project in Uttarakhand.
In the second list, CEA recommended 1.428 mmscmd gas allocation was recommended for 382.5 Mw Sugen plant of Torrent, 1.628 mmscmd to 407 Mw Jegurupadu stage-II, 3.137 mmscmd to 784.48 Mw Gautami stage-II, 1.49 mmscmd to Torrent’s 400 Mw Dahej plant, 1.44 mmscmd to 360 Mw RVK Energy’s plant in East Godavari district of Andhra Pradesh and 0.84 mmscmd each to Kashipur projects of Beta Infratech and Gama Infraprop.
The official said the allocations will first be made to the six plants like Bawana and Kondapalli projects which were suggested by Power Ministry in first place.
RIL is expected to reach 80 mmscmd of output from its eastern offshore KG-D6 fields sometime in 2012 or 2013. It currently produces about 57-58 mmscmd as opposed to close to 64 mmscmd of gas being allocated by the government to urea manufacturing units, power plants, LPG units, city gas projects, steel plants and refineries.
Besides state-owned Oil and Natural Gas Corp (ONGC) is to produce around 9 mmscmd more gas in 2011-12. Another 8 mmscmd is expected to be available from GSPC's KG Basin fields in 2012-13.
