The government has allowed diversion of natural gas that Rashtriya Chemicals and Fertilisers (RCF) receives from KG-D6 fields to power plants in Andhra Pradesh and Telangana to help generate 450 MW of electricity.
RCF gets 2.2 million standard cubic metres per day of gas from Reliance Industries' eastern offshore KG-D6 fields for production of urea at its plant located in Maharashtra. Gas from Andhra coast is ferried through a cross-country pipeline to RCF plants.
On the other hand, power plants in Andhra Pradesh and Telangana are dependent on use of imported gas (Liquefied Natural Gas) which can be imported only on the west coast because there are no LNG terminals on Andhra coast.
To tide over this issue, the government has allowed RCF's quota of KG-D6 gas to be supplied to the power plants. Instead, RCF will use the imported LNG that was meant to be supplied to the power plants.
For RCF, the so-called swap will be revenue neutral as the cost of imported LNG will be borne by the power plants and it will continue to pay the government fixed rate for KG-D6 gas.
"Department of Fertilizers has allowed swapping of KG-D6 gas presently being supplied to RCF Units located in Maharashtra with Regasified Liquid Natural Gas (RLNG), thereby facilitating supply of additional gas volume to the tune of 2.2 mmscmd to Andhra Pradesh and Telangana states," an official statement said here.
2.2 mmscmd of gas can generated 450 MW. Of this, Telangana will get 242 MW (53.89 per cent) and Andhra Pradesh about 208 MW.
Private power plants "located in the states of Andhra Pradesh and Telangana have pipeline connectivity (to receive KG-D6 gas), whereas the LNG terminals operational as on date are located on the western coast of the country.
"Further, even though East West pipeline provides physical connectivity of eastern part but it is not possible for LNG to flow from western parts of India to AP. Therefore, direct LNG supply to customers in AP and Telangana is not possible and can only be achieved through swapping of gas," it said.
State gas utility GAIL (India) Ltd will enter into necessary contractual arrangements with RCF, pipeline company RGTIL and private power stations for supply of imported LNG.
"This will help in mitigating the power shortage in Telangana state, which would benefit the farmers having 18.62 lakh pump sets in saving rabi crops. Further, the unscheduled power cuts in Telangana state can be minimized to a great extent, which will also help the consumers of Telangana state and public at large. This will also help AP state to mitigate the power deficit and benefit the farmers of the state," the statement said.
