Former Enron power plant to get priority for Reliance gas

December 4th, 2008 - 3:24 pm ICT by IANS  

New Delhi, Dec 4 (IANS) Ratnagiri Power Project, set up in Maharashtra by now-bankrupt Enron of the US, will get priority for gas produced by Reliance Industries Ltd from the Krishna-Godavari basin, off the coast of Andhra Pradesh, it was announced Thursday.”While confirming the overall prioritisation of sectors, the government has accorded priority to Ratnagiri Power Project Ltd along with fertilizer units,” the ministry of petroleum and natural gas said in a statement.

The power project will be supplied 1.4 million metric standard cubic meter per day (mmscmd) between January and March next year, 2.7 mmscmd till Septeber and 8.5 mmscmd thereafter.

The allocation, however, is subject to commencement of production, within the overall allocation of 18 mmscmd for the power sector decided earlier, the statement added.

The supply will be made at a selling price of $4.2 million British thermal units that is equal to $60 per barrel of crude oil for all customers as decided by a group of ministers last year. This excludes the transportation cost and tax.

Ratnagiri power project, which was promoted by the now-bankrupt US energy giant Enron, is now a joint venture between two state-run enterprises, NTPC and GAIL. Projects in Andhra Pradesh have also staked claimed to Reliance gas.

The statement also said that the oil ministry would take all decisions regarding the supply of natural gas to consumers by Reliance Industries and other operators, while taking into account the court orders.

The Mukesh Ambani-led Reliance Industries and his brother Anil Ambani-led group have been fighting a bitter court battle over the supply of the gas to be pumped from the Krishna-Godavari basin. NTPC is fighting a similar case and final verdicts are awaited.

“Regarding the NTPC-Reliande Industries sale price, it has been decided that the verdict of the court should be awaited,” the oil ministry statement said.

The ministry said that it would ensure a “workable gas sale purchase agreement” is evolved for the sale of gas to be produced under the new policy for auction of hydrocarbons.

The oil ministry said that for sponge iron and steel plants, the supplies would depend on Reliance Industries being able to produce more than 40 mmscmd from the field. The company estimates that it can eventually produce 80 mmscmd.

The oil ministry had earlier decided to supply 3 mmscmd for the existing natural gas-based liquefied petroleum gas plants. But now, the government will study the cost-benefit analysis of supplying natural gas to such plants.

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