Name new customers for KG-D6 gas soon, Reliance Industries tells govt

Says captive power plants can consume 8-10 mmscmd of gas

Reliance Industries Limited’s eastern offshore KG-D6 fields can produce more than 60 million standard cubic meters per day but the firm is being forced to keep output below 40 mmscmd as the government has not yet released allocation to new customers.

“There being an immediate demand from the existing customers in various sectors to consume more than 80 mmscmd gas, we once again request you to make additional allocations which will enable us to increase the production of gas from KG-D6 to 80 mmscmd,” RIL wrote to the Petroleum Ministry.

The government has allocated 15.1 mmscmd of KG-D6 gas to fertiliser units, 3 mmscmd to LPG plants, 18 mmscmd to power firms, 0.83 mmscmd to city gas projects and 3.75 mmscmd to steel plants. Of this firm allocations, customers like NTPC, Dabhol and Essar Power are yet to draw 6.95 mmscmd gas.

Stable production

Reliance Industries Limited said because of inability of these companies, 11 mmscmd gas was being sold to the identified power plants on fallback or temporary basis and demanded that this be converted to firm allocation.

“This will enable us to maintain a stable production of gas and will also benefit customers because the KG-D6 gas is the cheapest gas available in India today,” it stated.
Further, Reliance Industries said that several captive power plants can consume 8-10 mmscmd of gas. “Since captive power plants have already been identified as one of the priority sectors, we request you to allow us to supply gas to these captive power plants.”
“As informed earlier, KG-D6 currently has a capacity to produce more than 60 mmscmd today and this will increase to 80 mmscmd shortly,” RIL President (gas business) R P Sharma wrote to the ministry on September 8.

The contracting priority released by the government for the power sector customers was valid till September 30, 2009. Also the firm quantity identified is only for 60 per cent of the plant capacity (70 per cent in some cases). “In view of increased gas availability potential, we request that all the allocations be extended till the validity of the contract, ie 5 years, at 90 per cent plant capacity,” it said.