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Home News Power Sector News Power sector honchos seek natural gas on priority basis

Power sector honchos seek natural gas on priority basis

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Power HonchosLeading power sector honchos on 22-02-2012 met the Principal Secretary to the Prime Minister, Pulok Chatterjee, and demanded that steps be taken to address their long-pending demands, including immediate allocation of gas to all the projects recommended by the Power Ministry, reforms in the debt-ridden state electricity boards and priority in gas allocation to power and fertilizer sectors in the XII Plan. They also sought an assurance that gas may be given to the remaining projects which will be completed in 2012-13, including preferential allocation of natural gas as recommended by the Saumitra Chaudhuri Committee on natural gas price pooling.

They also urged the PMO to issue a clear directive that no further gas-based capacity would be considered for allocation until existing XI Plan gas demand was fulfilled from domestic gas ramp-ups and long-term gas supply agreements to be signed (in line with government directive for coal) and bulk LNG imports to be undertaken to fulfil the short-term demand.

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.

 Top executives of private power companies including Anil Ambani and Cyrus Mistry today met by Prime Minister's Principal Secretary Pulok Chatterji and sought immediate gas allocation on priority basis for the sector, sources said.

Private power producers led by Reliance Power's Anil Ambani asked Charterji to snap gas supplied by ONGC to non-priority sector. They wanted a pool to be created of the gas thus freed and the about 25 mmcmd of KG-D6 gas supplied to power sector.

This pool, they wanted, should be distributed pro-rata among the operating and about to be commissioned power plants.

The meeting comes days ahead of a crucial meeting of the Empowered Group of Ministers (EGoM) 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 (NELP) like KG-D6, the power firms want the gas produced by ONGC from nominated fields, called APM gas, too 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.

Emerging out of the meeting, Association of Power Producers (APP) Director-General, Ashok Khurana said Mr. Chatterjee agreed with the proposal given by the delegation and assured that the recommendations made by them would be addressed immediately.

At present, almost all of the 35 million standard cubic metres per day (mscmd) of gas output from KG-D6 field is consumed by priority sectors of fertilizer and power, over 7 mscmd of gas produced by state-owned ONGC is being supplied to non-priority sectors.

Those who met Mr. Chatterjee included Reliance Power Chairman Anil Ambani and Tata Group Chairman-designate Cyrus Mistry.

The power sector leaders urged the government to snap gas supplied by ONGC to non-priority sector. They wanted a pool to be created for the gas thus freed and the about 25 mscmd of KG-D6 gas supplied to the power sector.

Interestingly, the EGoM will be struggling to allocate gas as the demand for more power comes amid projections by RIL that output from KG-D6 will dip to 27 mscmd next fiscal and to about 22 mscmd in the year thereafter.

The leaders also met Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Source- Hindu

 

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