RIL stops gas supply to power plants as D6 output dwindles

Reliance Industries Ltd (RIL) has stopped supplying gas to power plants after output from its block in the Krishna-Godavari Basin (KG-D6) hit an all-time low.

This has prompted power minister Jyotiraditya Scindia to press for convening an urgent meeting of a ministerial panel to rework allocations, according to a PTI report, which cited official sources.

Last month, output from RIL's KG-D6 block fell to 16.46 million standard cubic metres per day (mscmd), not even sufficient to meet the requirement of urea-manufacturing fertiliser plants and liquefied petroleum gas (LPG) plants, and left no gas for power plants that are placed behind these on the government's supply priority list.

RIL, which was supplying a little less than 1 mmscmd of gas to power plants in February, completely stopped giving fuel to them in March.

With at least 13 plants having aggregate electricity generation capacity of 5200 MW shutting because of lack of gas from KG-D6, Scindia has asked defence minister A K Antony, chairman of the empowered group of ministers on gas pricing and commercial utilisation of gas, to immediately convene a meeting of the panel to address the situation.

The power ministry wants the sector to be given the same status as fertilisers, and whatever supplies of gas available from KG-D6 should be pro-rata distributed among the two sectors, PTI quoted sources as saying.

Currently, the fertiliser sector is accorded top priority, followed by LPG producing plants and then power stations.

When KG-D6 gas production began to dip sharply, the government in 2011 ordered a pro-rata cut in supplies to 25 power plants, which had an original allocation of 28.90 mmscmd of gas. But there was no cut in the 15.668 mmscmd allocation to 16 fertiliser plants.

Now there isn't any gas left for them as KG-D6 output dipped to 16.46 mmscmd, which was consumed by fertiliser plants (14.79 mmscmd) and LPG sector and gas pipeline (1.67 mmscmd).

The KG-D6 fields, which began production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress shut down more than one-third of the wells.