Our Bureau

Hyderabad, Nov 29

Reliance Industries and the Andhra Pradesh Government today agreed to create a gas grid in the State and pave the way to formulate supply terms for gas from the Krishna-Godavari (KG) basin.

The move follows a recent assurance made by Reliance Chairman Mr Mukesh Ambani that the gas produced from the KG basin will first meet the State requirement before being supplied to other consumers across the country.

AGREEMENT

It is learnt that following parleys between Chief Secretary Mr J. Harinarayana, and Reliance officials today, Reliance agreed to provide the necessary gas supplies to industrial consumers, power and fertiliser plants, RTC buses and domestic consumers through a gas grid.

However, consumers would enter into a separate supply agreement depending on the requirements.

Reliance is set to evacuate gas from the KG basin by June 2008. The State is concerned about gas supply.

The Reliance assurance comes as a shot in the arm for the Government as gas-based power generating stations with total capacity of about 2,500 MW are unable to operate to capacity due to paucity of gas. In fact, of the 2,500 MW, about 1,200 MW is yet to go on stream due to inadequate gas.

(This article was published in the Business Line print edition dated November 30, 2006)
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