The Hindu Business Line : Reliance KG basin raises hopes of power and fertiliser firms

‘Subject to the outcome of the court case, we expect the gas shortage for the bulk users such as power plants and fertilizer firms in the State will be met first’

V. Rishi Kumar

Hyderabad, Sept. 23 With Reliance Industries indicating natural gas production from the Krishna-Godavari basin in early 2009, there is hope and anticipation in industrial and power sector consumers in particular.

However, while they expect to sign up for supply pacts with Reliance, they await the outcome of a case now pending in the Bombay High Court.

The Advisor of Andhra Pradesh Government, Dr D.A. Somayajulu, said the firm gas supply from KG wells will help add about 2700 MW power generation capacity and help industries including fertiliser plants such as Nagarjuna Fertiliser and Chemical Ltd.,

Speaking to Business Line on the development, Dr Somayajulu said he had talks with the Reliance officials early on Monday and they hinted at generating gas early next year. Once they start generating, they would not be able to store and will have to supply to bulk consumers first.

“Subject to the outcome of the court case, we expect the gas shortage for the bulk users such as power plants and fertilizer firms in the State will be met first,” he said.

Asked about the status of State gas distribution network, Dr Somayajulu said that the State had taken a decision on September 5 to induct Reliance onto the State’s special purpose vehicle with other partners including IL&FS, GSPCL (Gujarat State Petroleum Corporation Ltd).

The SPV was formed with these partners initially with the expectation that GSPCL would be able to extract gas by 2008-09. However, as things stand today, it will take at least three more years for GSPCL to produce gas. Therefore, we decided to induct Reliance onto this network and thereby create a pipeline to support the supply of gas in select cities, which were initially located along the pipeline.

The gas supply, through the pipeline grid, will help bring down cost to about at least 50 per cent of current supply rate for domestic consumers, he said.

However, RIL is yet to spell out its plans for city distribution network in the State, but has expressed its intent to supply to cities along the pipeline network.

Related Stories:
RIL to start production of gas in KG basin from Jan-March
Reliance starts pumping crude from Krishna-Godavari basin

More Stories on : New Projects | Petroleum | Power | Fertilisers | Reliance Industries Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page