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The Government on Friday decided that any additional domestic gas available in the next three years would be allocated to power sector.
This has been decided at a meeting of the empowered Group of Ministers headed by Defence Minister A.K Antony.
“We would not divert any gas from fertiliser sector. Any new gas coming in 2013-14, 2014-15 and 2015-16 would be given to power sector,” a Senior Petroleum Ministry official told Business Line .
The official added that about 10-11 mmscmd of additional natural gas are estimated to be produced domestically in the next three years.
“We cannot predict the availability beyond that,” he added.
On July 17, the empowered Group of Ministers decided not to divert any natural gas allocated to fertiliser sector from the Reliance Industries Ltd (RIL) operated KG D6 block.
“Today's decision is that the requirement of fertiliser (that is urea) will be protected. The requirement for the agriculture sector will be fully protected. While doing that the possibilities are being explored, whether any additional gas can be made available for the power sector,” Petroleum Minister, M. Verrappa Moily, had said on July 17.
Gas requirements of Power sector
While the Power Ministry has been making a strong case for considering gas-based power plants as the priority sector while making gas allocation, fertiliser industry want the status quo to be maintained. Currently, fertiliser is in the priority sector, while supplies to power sector are zero since March 2013.
Earlier in the day, Minister of State (Independent Charge) for Power Jyotiraditya Madhavrao Scindia said that his Ministry is taking a five-phase strategy to fire the gas-starved power plant.
This includes giving priority status to the sector, additional gas from domestic fields to be offered to power stations, pooling, import of gas at zero custom duty and run gas-based plants to meet peaking power demands.
Scindia said that about 7,818 mw of gas-bases power plants are stranded due to unavailability of fuel, while another about 16,800 mw are operating at just 23.7 per cent plant load factor.
Current output from D6 block is less than 15 mmscmd, which is not sufficient to meet even the core sector allocation made earlier.
Production from D6 started in April 2009 and reached its peak of 61 mmscmd in March 2010. The priority sectors including power were supplied full quantity till decline in production started from April 2010. To deal with this decline, pro-rate cuts were initially imposed across sectors between July 2010 and March 2011.
With the operator Reliance Industries Ltd and its partners unable to control the decline in output, the Ministry for Petroleum & Natural Gas enforced a priority cut in the following order: non-core sector, city gas distributor sector, power, LPG, and fertiliser.
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