New Delhi/Mumbai: The five-member empowered group of ministers, or eGoM, headed by stand-in finance minster Pranab Mukherjee, will meet on Monday to decide on allocation of natural gas from Reliance Industries Ltd’s (RIL’s) eastern offshore KG-D6 fields to power plants.
Distribution among fertilizer plants has already been decided.
“There are a lot of power companies who need gas. There was a need for an eGoM meeting for which we needed the Election Commission’s permission,” Union minister for petroleum and natural gas Murli Deora told Mint.
Awaiting nod: Union petroleum minister Murli Deora. Pankaj Nangia / Bloomberg
According to persons familiar with the matter, the meeting will decide on the allocation among the power plants, giving preference to units in Andhra Pradesh and Maharashtra.
“As production from KG-D6 is expected in a few weeks, it is emergent to take a decision regarding supply of gas so produced to power plants,” a ministry letter to the Election Commission seeking its approval to hold the meeting said. With the general election close, the government needs the Election Commission’s approval for any policy decision.
KG-D6 is the gas-rich block in Krishna-Godavari basin off the Indian coast in which RIL owns 90% controlling interest. RIL will start producing 10 million standard cubic metres per day (mscmd) and ramp it up to peak output of 80mscmd by the end of 2009. The government has outlined an utilization policy for this gas, listing the priority gas recipients as existing fertilizer, LNG, petrochemical and power plants followed by city gas distribution projects and refineries.
So far, 15mscmd has been allocated among urea manufacturers.
Clearing the air that this sudden eGoM meeting was not to shuffle the priority list, a ministry official who did not want to be named, said, “The meeting is for the finalization of gas allocation but there is no proposal to change the gas priority allocation.”
RIL has sent revised gas sales and purchase agreement to the identified urea plants and is expected to sign the pacts within the next 10 days.
(Bhuma Shrivastava and Utpal Bhaskar contributed to this story.)