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Five more power plants seek gas from RIL’s KG-D6 fields

Five more power plants seek gas from RIL’s KG-D6 fields
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First Published: Wed, Aug 05 2009. 04 26 PM IST
Updated: Wed, Aug 05 2009. 04 26 PM IST
New Delhi: Five more power plants have joined the scramble for natural gas from Reliance Industries’ KG-D6 fields, seeking a minimum allocation of 4.73 million cubic metres a day.
Two power plants each in Delhi and Andhra Pradesh and one in Gujarat have sought gas from RIL fields before they are commissioned this fiscal, a government official said.
RIL is currently producing 36 mmscmd gas from KG-D6, half of which goes to power plants. The firm has the capacity to produce 60 mmscmd but is constrained to produce less as the government is yet to identify customers for buying gas beyond the initial 40 mmscmd, allocated primarily to fertiliser and power producers in accordance with the Gas Utilisation Policy.
RIL cannot sell gas to these and other users including its own refineries, which are starved of the fuel, unless allocation is approved by the government.
The official said the Central Electricity Authority, the technical arm of the Ministry of Power, has recommended 1.37 mmscmd of gas to Lanco’s 366 MW Kondapalli extension project, which will be commissioned in February 2010.
It sought 1.21 mmscmd for the 374 MW Utran plant in Gujarat, which will go on stream in November, and 0.82 mmscmd for the 220 MW Tanir Vavi plant before its commissioning in March 2010. For the 108 MW Tithalia and 250 MW Bawana power plants in Delhi, the CEA recommended 0.40 mmscmd and 0.93 mmscmd of gas from KG-D6.
The CEA has recommended these allocations considering a maximum power capacity of 70% and if these plants operate at full capacity, the requirement would be 6.33 mmscmd, the official said.
He said from among the customers so far identified by the government, Ratnagiri Gas and Power, the firm that operates the Dabhol plant, and state-run NTPC are yet to draw even a single unit from RIL’s Krishna Godavari (KG) basin D6 fields.
RGPPL has been allocated 2.7 mmscmd but is not taking any gas as it has a contract to buy gas from Petronet LNG Ltd till September-end. NTPC, which was allocated 2.67 mmscmd, has not signed the contract with RIL so far.
Fertiliser firms, who had been given the first right over KG-D6 gas, from this week are drawing 14.5 mmscmd, the highest ever after urea-making plants that were shut for maintenance became operational. Fifteen fertiliser firms have been allocated 14.96 mmscmd gas.
Power firms are drawing 18 mmscmd while steel makers like Essar are drawing between 3 and 3.5 mmscmd, the official said.
The RIL spokesperson declined comment.
Sources said RIL gas sales will cross 40 mmscmd the day the country’s largest gas-fired power plant, RGPPL, starts drawing gas.
RGPPL currently buys 4-5 mmscmd of expensive imported liquefied natural gas (LNG) under a take-or-pay agreement from Petronet. Its allocation is 8.4 mmscmd in April next year.
Oil regulator directorate general of hydrocarbons, in a recent status report on KG-D6 gas, stated: “(So far eight wells have been put on production). These eight wells have a maximum production potential of about 50-52 mmscmd and (the wells are producing less to match the present offtake ...)”
The gas production potential is likely to increase further to 80 mmscmd after nine other completed wells are put on production by the end of August, the DGH said.
RIL has so far signed contracts with 15 fertiliser plants for 14.96 mmscmd gas and 19 power plants for 25.07 mmscmd. Besides, 3.31 mmscmd gas has been committed to steel plants.
Petroleum minister Murli Deora had told Parliament that an additional 25 mmscmd would need to be supplied to existing power plants to enable optimum operations and to power plants to be commissioned in 2009-10, which would lead to an additional generation of over 5,000 MW.
Besides, demand from other industries like refineries have also to be met from the KG-D6 fields.
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First Published: Wed, Aug 05 2009. 04 26 PM IST
More Topics: RIL | Gas | Power | KG Basin | Power plants |