Reallocate RIL gas to core sector, say power companies

With Reliance Industries' natural gas output at its eastern offshore KG-D6 field falling below 39 cu ft per day due to closure of five wells, private power producers have asked the government to  reallocate natural gas currently being supplied to non-core users like refineries and steel plants.

Independent Power Producers Association of India (IPPAI) director general Ashok Khurana has written to minister of petroleum and natural gas Jaipal Reddy requesting the government to ''consider discontinuing gas to non-core sectors and use the same for core sectors, namely power and fertiliser''.

Khurana pointed out in his letter that at present over 18 million standard cubic metres per day (mmscmd) of natural gas is being supplied to non-priority / core sectors, while gas-based power projects with a generation capacity of about 4,000 MW that were ready to commence power generation before 31 March 2012, were awaiting gas allocation by the empowered group of ministers.

Gas discoveries in India over the last few years prompted an aggressive addition to the gas-based power generation capacity in the country. However, gas production from these discoveries has lagged expectations (See: Prospects for gas-based power plants not adverse: CRISIL).

This has created a challenge for these new plants that will add a massive 70 per cent to the existing gas-based capacity of a little over 16,000 MW.

Currently, 16,600 MW of power is generated from power plants that use natural gas as feedstock, and these plants currently consume 66 mmscmd of gas. The average capacity utilisation of these plants is around 70 per cent.