Reliance Industries to get gas after fertilizer, power plants

January 22nd, 2009 - 10:42 pm ICT by IANS  

New Delhi, Jan 22 (IANS) The Empowered Group of Ministers (EGOM) on gas utilisation from Reliance Industries’ (RIL’s) KG-D6 hydrocarbon block in the Krishna Godavari basin has decided that Reliance’s own industries will be eligible for supply only after the needs of fertilizer units and power plants are met, the government said Thursday.In a statement, the ministry of petroleum and natural gas said the total production of gas will reach a “plateau” of around 80 million metric standard cubic metre per day (mmscmd) by 2012, before it starts dwindling from 2017.

In its meeting Jan 8, the EGOM had decided that demand from petrochemical facilities, refineries, steel plants and RIL’s downstream units will be met only after production from KG-D6 field increases 50 mmscmd.

Crucially, it said, allocations for new power projects including Reliance Natural Resources Ltd’s Dadri power project will be done based on gas availability and their date of commencement of work.

“Subject to the availability of gas, necessary allocations from RIL KG-D6 field would be made to power projects, including Dadri Power Project, that are in the pipeline, after receiving necessary clearance and permission as and when they are ready to commence production. This will be without prejudice to the decisions of the court cases,” said the government communiqué.

The high-level group agreed to the request of department of fertilizers that gas major GAIL Ltd send a term-sheet to fertilizer companies proposing to make supplies from any of the available sources - KG-D6 field, re-liquefied natural gas fields and other fields - to help implementation of fertilizer projects.

“GAIL and fertilizer companies should finalize the term-sheets, so that these projects are taken up for implementation,” it said.

At the same time, the fertilizer department has been asked to explore the viability of using naphtha as an energy source in the plants in view of the decrease in naphtha prices.

It said power projects in Andhra Pradesh will get priority among the power sector consumers, and said the power and petroleum ministries should together discuss the plant-wise requirement and proposed supply.

Further, the EGOM said that there requirement of gas for the Kakinada-Hyderabad-Uran-Ahmedabad pipeline, constructed by Reliance Gas Transportation Infrastructure Ltd, would be met, “as the pipeline is critical to evacuation of natural gas from KG-D6 field”.

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