RIL gas sales rise to 36 mmscmd a day

RIL gas sales rise to 36 mmscmd a day

RIL now has the capacity to produce 60 mmscmd but is constrained to produce less as the government is yet to identify customers beyond the initial 40 mmscmd that had been allocated primarily to fertiliser and power producers in accordance with the Gas Utilisation Policy.

Sources said from among the customers identified by the government, Ratnagiri Gas and Power, the firm that operates the Dabhol plant, and state-run NTPC are yet to draw even a single unit from RIL's Krishna Godavari (KG) basin D6 fields.

Ratnagiri Gas and Power has been allocated 2.7 mmscmd but is not taking any gas as it has a contract to buy gas from Petronet LNG Ltd till September-end. NTPC, which was allocated 2.67 mmscmd, has not signed the contract with RIL so far, they said.

Fertiliser firms, who had been given the first right over KG-D6 gas, from this week are drawing 14.5 mmscmd, the highest ever after urea-making plants that were shut for maintenance became operational. Fifteen fertiliser firms have been allocated 14.96 mmscmd of gas.

Power firms are drawing 18 mmscmd while steel makers like Essar are drawing between 2.5 and 3 mmscmd, they said.

The RIL spokesperson declined comments.

Sources said RIL gas sales will cross 40 mmscmd a day when the country's largest gas-fired power plant, RGPPL, starts drawing gas.

RGPPL currently buys 4-5 mmscmd of expensive imported liquefied natural gas (LNG) under a take-or-pay agreement from Petronet. Its allocation of gas from KG-D6 would increase to 8.4 mmscmd in April next year when all the electricity generation units at Dabhol are fully functional.

Oil regulator Directorate General of Hydrocarbons, in a recent status report on KG-D6 gas, stated: "(So far eight wells have been put on production). These eight wells have a maximum production potential of about 50-52 mmscmd and (the wells are producing less to match the present offtake ...)"

The gas production potential is likely to increase further to 80 mmscmd after nine other completed wells are put on production by the end of August, the DGH said.

RIL has so far signed contracts with 15 fertiliser plants for 14.96 mmscmd gas and 19 power plants for 25.07 mmscmd. Besides, 3.31 mmscmd gas has been committed to steel plants.

Petroleum Minister Murli Deora on Monday told Parliament that an additional 25 mmscmd would need to be supplied to existing power plants to enable optimum operations and to power plants to be commissioned in 2009-10, which would lead to an additional generation of over 5,000 MW.

Besides, demand from other industries like refineries have also to be met from the KG-D6 fields.

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