'Divert natural gas from non-priority sector'

To address the severe fuel shortage, private power producers on Wednesday urged the government to divert scarce natural gas from non-priority sector, like petrochemical plants, to electricity generation.

Top executives of private power companies including Anil Ambani from Reliance Power and Cyrus Mistry from Tata Power met Pulok Chatterji, the principal secretary of  Prime Minister Manmohan Singh, and sought immediate gas allocation on priority basis for the sector, sources said.

This was the second meeting from power companies executives with the PMO to sort out the issues related to the power sector. The prime minister had earlier constituted the committee headed by Chatterji to address the issues hurting the power sector growth.
While almost all of the 35 million cubic meters per day natural gas output from Reliance
Industries’ eastern offshore KG-D6 field is consumed by priority sectors of fertilizer and power, over 7 mmcmd of gas produced by state-owned ONGC is being supplied to non-priority sectors.

Crucial meet

Wednesday’s meeting comes days ahead of a crucial meeting of the Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee on gas allocation on February 24.
While the EGoM has the mandate for allocation of gas produced from block awarded under New Exploration Licensing Policy like KG-D6, the power firms want the gas produced by ONGC from nominated fields, called APM gas, also be included in its mandate for allocation to priority sector.

The demand comes amid projections by RIL that output from KG-D6 will dip to 27 mmcmd next fiscal and to about 22 mmcmd in the year thereafter.