New Delhi: After protests lodged by Reliance Industries, the Petroleum Ministry has decided to restore gas supplies to its petrochemical plants from Panna/Mukta and Tapti fields, but other consumers may not get such preferential treatment.
The ministry, which had in December 2007 cancelled almost all contracts for sale of gas produced from PMT fields and asked state-run GAIL to sell it to critical power and fertiliser sectors, has decided to restore 3.6 million cubic meters of gas per day to RIL’s petrochemical plants, government sources said.
Of the 17 mmscmd gas produced by PMT joint venture of RIL-ONGC-BG, GAIL may get 3 mmscmd for its LPG fractionators and petrochemical units, while Gujarat Gas’ allocation may be curtailed to 2.1 mmscmd from earlier 3.05 mmscmd.
Torrent Power and Rajasthan Rajya Vidyut Nigam Ltd, who too had protested against the ministry’s decision, would also see restoration of 0.9 and 1.5 mmscmd gas allocation. The rest would be given to power and fertiliser sectors, they said.
Industry sources said small consumers in Gujarat, who had contracted PMT gas supplies from Gujarat Gas, would be the worst hit by the ministry’s decision.
With curtailment in its supplies, Gujarat Gas would limit supplies to city gas projects in the state. This may force some industries to run their captive power units on expensive liquid fuels in the absence of connectivity with power grid.
Gujarat Chief Minister Narendra Modi has already taken up the issue with Prime Minister Manmohan Singh, but unlike Reliance whose protests letters got supplies restored, his request may not find favour, sources said.
The Petroleum Ministry, which had in 2005 given the PMT joint venture freedom to market gas, in a surprise move in December 2007 decided to divert all of PMT gas to GAIL, barring quantities committed to Rajasthan Rajya Vidyut Utpadan Nigam (RRVUNL), for sale at higher price of $5.7 per million British thermal unit (mBtu).
The biggest beneficiary of the decision would be GAIL, which previously did not receive any gas for its units from PMT.
The ministry’s decision had also met with protest from Torrent Power which feared that its 12-year gas supply contract with ONGC for 0.9 mmscmd may not be honoured.
Panna/Mukta and Tapti fields, off the west coast in the Arabian Sea, are jointly operated by RIL, British Gas and Oil and Natural Gas Corp.
RIL-BG-ONGC had entered into contracts for sale of the gas they produced to various units including their affiliates. All these contracts were cancelled in December 2007 but some like supplies to RIL’s petrochemicals plant at Hazira and its subsidiary IPCL plants at Gandhar and Vadodara have been restored.