An empowered group of ministers headed by finance minister Pranab Mukherjee is likely to allocate on Tuesday a bulk of the additional natural gas from Reliance Industries' KG-D6 fields to power plants to boost sagging economic growth.
The EGoM is to consider fixing users for about 50 million cubic meters per day of KG-D6 gas, official sources said. This is in addition to the initial 40 mmscmd output that was previously distributed primarily to urea and power plants.
Sources said as per the agenda prepared by the oil ministry, the power sector would get more than two-third of the additional gas to boost electricity generation.
Refineries, including those of RIL, would get over 11 mmscmd.
RIL's petrochemical plants have been proposed to be given 1.918 mmscmd.
Of the 50 mmscmd, 20 mmscmd would be allocated on firm basis while the balance on temporary or fallback basis till such time that RIL is confident of producing 90 mmscmd of gas on a sustained basis.
Power plants will get 12.08 mmscmd of gas on firm basis and an additional 11.99 mmscmd on fallback basis. Captive power plants are proposed to be given 10 mmscmd on temporary basis, thereby meeting the entire 42.07 mmscmd fuel deficit that was left at existing power plants even after the allocation of 18 mmscmd from the initial volumes. Out of the gas to be allocated on firm basis, 0.178 mmscmd would go to non-urea subsidized fertilizer plants and 0.44 mmscmd to steel plants.
Refineries, including those of RIL, have been proposed to be given 5.384 mmscmd and an additional 6 mmscmd on fallback basis, sources said.
With the gas requirement at GAIL's petrochemical plant being already met from existing volumes, an allocation of 1.918 mmscmd has been proposed to be made on firm basis to
RIL's Gandhar and Nagothane petrochemical plants in Gujarat and Maharashtra respectively.
Sources said the ministry has proposed to give an additional 2 mmscmd to city gas projects over and above the 0.87 mmscmd already contracted from existing volumes.
RIL has said production capacity from KG-D6 has far exceeded the 40 mmscmd, for which buyers have been tied-up and additional customers had to be named immediately to avoid irreversible damage to the field reservoirs.
Of the 40 mmscmd, 15.33 mmscmd had gone to urea plants, 18 mmscmd to power plants, 3 mmscmd to LPG making units, 3.75 mmscmd to steel plants and city gas projects have got 0.87 mmscmd.
Sources said the ministry has proposed to hike allotment to power sector by 12.08 mmscmd on firm basis. This allocation has been made considering 75 per cent of plant capacity for units in Andhra Pradesh and 70 per cent outside the state which is the landfall point of KG-D6 gas.
Previously 18 mmscmd had been allocated to the sector considering 70 per plant load factor or installed capacity in Andhra Pradesh and 60.5 per cent outside the state.
Further, an additional 11.99 mmscmd is proposed to be allocated to power plants and those to be commissioned this year on fallback basis to further increase their PLF. Another 10 mmscmd has been allocated to captive power plants on fallback basis, sources said.
With these allocations, the entire demand of the power sector at 42.07 mmscmd would be met.
An additional 0.44 mmscmd gas from KG-D6 will be allotted to existing gas-based steel plants on firm basis on top of the 3.75 mmscmd already allocated.
RIL's Gandhar petrochemical plant will get 1.168 mmscmd of KG-D6 gas while its Nagothane plant would get 0.75 mmscmd.
Since the refineries are using costly alternatives like fuel oil for processing and burning naphtha for hydrogen production, the EGoM will consider replacing these with cheaper and environment-friendly fuel.
Seven public and private sector refineries need 22.8 mmscmd of gas but only 5.384 mmscmd is being given to them on firm basis and another 6 mmscmd on fallback basis.
Image: Pranab Mukherjee
