Anil calls on Reddy, seeks gas for Samalkot plant expansion

"He (Anil Ambani) is interested in power projects. He met me in that connection," Reddy told reporters after the meeting which last about an hour.Anil Dhirubhai Ambani Group (ADAG) firm Reliance Power is building a 2,400 MW unit adjacent to its Samalkot plant in Andhra Pradesh and needs about 8 million standard cubic meters per day of fuel.
Reddy said the ADAG chairman sought natural gas for power projects, but refused to give details.

Ambani did not take questions from media persons after the meeting."We discussed (gas requirement of power plants) in generalised terms," Reddy said, adding that gas allocation was done by an Empowered Group of Ministers and Anil Ambani's "suggestion and request" will be considered by that group.

Yesterday, Reliance Industries Executive Director P M S Prasad had made a "courtsey" call on Reddy. After the meeting, which last over an hour, Prasad had said this was his first ever meeting with Reddy, who last month took over as the Oil Minister.

The power ministry has favoured allocation of most of the new gas output from fields like those of Reliance Industries, to projects like Samalkot expansion.

It has recommended allocation of 20.96 mmscmd of gas to seven projects, including Samalkot expansion, for allocation of gas. The projects are the ones that will come up in the 11th Five Year Plan period ending March 31, 2012.

Sources said the government has not been able to make any new allocation since last year owing to falling output from Reliance's eastern offshore KG-D6 fields and no new field coming on production in near future.

KG-D6 output in the week ended January 31 was about 51 mmscmd, down from 60 mmscmd achieved in mid-2010. The output is short of 63 mmscmd for which government has notified users.

Of the current production, 14 mmscmd is sold to fertilizer plants, 25 mmscmd to power plants and the balance 12 mmscmd to petrochemical plants, refineries and other sectors.
EGoM had in July last year decided not to make any new allocation as additional output of 20 mmscmd from KG-D6 fields was expected only in 2012-13, while state-owned Oil and Natural Gas Corp (ONGC) is to produce around 9 mmscmd more gas in 2011-12. Another 8 mmscmd is expected to be available from GSPC's KG Basin fields in 2012-13.