JOIN USAfter power plants, LPG producing units are the latest to face complete stoppage of natural gas supplies from Reliance Industries' KG-D6 block after output from the eastern offshore fields dropped to an all-time low.
"KG-D6 gas supplies to our LPG plants has completely stopped. We are getting no gas," a GAIL official said.
GAIL was allocated 2.59 million standard cubic metres per day of gas from KG-D6 fields for production of cooking gas (LPG).
KG-D6 production has dropped to just over 14 mmscmd which is enough to met the requirement of fertiliser plants, which had been given top priority in gas supplies.
The government had given fertiliser top priority in allocation and supply of KG-D6 gas. After fertiliser, LPG units was given second top most priority, followed by power, steel, refineries and petrochemicals in that order.
This meant when KG-D6 production started to fall towards 2010-end, supplies to non-core sectors of steel, refineries and petrochemicals was first cut pro-rata and then completely stopped.
Since early May, none of the 25 power plants that were allocated gas from KG-D6 fields, have not received any supplies, sources said.
Of the current output 14.2 mmscmd is being consumed by the urea-manufacturing fertiliser plants and a small quantity is being used to fire the East-West pipeline that transports the fuel from its landfall point at Kakinada in Andhra Pradesh to Baruch in Gujarat.
This left no gas for LPG plants, sources said. A RIL spokesperson could not be immediately reached for comments.
The Bay of Bengal KG-D6 fields, which began gas production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress led to shutting down of more than one-third of the wells.
This peak output comprised 66.35 mmscmd from Dhirubhai-1 and 3, the largest of the 18 gas discoveries on the KG-D6 block, and 3.07 mmscmd from MA field, the only oil discovery on the block.
D1&D3 output has since fallen to about 10 mmscmd while gas production from MA field, which had hit a peak of 6.78 mmscmd in January 2012, has fallen to just about 4 mmscmd.
Sources said when KG-D6 gas production began to dip sharply, the government in 2011 ordered a pro-rata cut in supplies to 25 power plants which had an original allocation of 28.90 mmscmd of gas.
But there was no cut in the 15.668 mmscmd allocation to 16 fertiliser plants and LPG units that were allocated 2.59 mmscmd.
Sources said for the last two months, LPG plants were not getting its full share as KG-D6 production as not enough to meet demand of both fertiliser plant and LPG unit. Supplies to LPG units has now completely stopped.