EGoM to step in to secure gas supplies to power projects

The six plants have a requirement of 15.59 million standard cubic meters mmscmd per day of gas.

Close on the heels of the PMO stepping in to play a direct role in sorting out the fuel woes faced by coal-fired power project developers,a much-delayed ministerial panel meeting on gas allocations to upcoming projects is slated to take place later this month.

The meeting of the empowered group of ministers EGoM,which has been hanging fire for well over six months,is now expected to take decisive action by way of diverting gas supplies from non-priority sectors such as refineries,petrochemical and steel units to power and fertiliser rojects. Upcoming gas-based power projects are faced with a serious fuel crunch amid lower-than-expected output from key domestic gas fields. Half a dozen gas-based power units that are either in advanced stages of commissioning or have started operations are to be considered for fuel allocation in the meeting.

Government officials involved in the exercise said the eGoM,which had last met on July 28 last year,is likely to take up the issue of allocation of gas to the power units on a priority basis so that all of them can be commissioned within the Eleventh Five-Year Plan period ending March 2012. The six plants have a requirement of 15.59 million standard cubic meters mmscmd per day of gas. The move is aimed at preventing the idling of gas-based capacity for want of fuel, an official said.

A handful of other projects,including Reliance Powers 2,400 MW Samalkot expansion project in Andhra Pradesh and Torrents Sugen extension project,are also likely to be considered for allcoation of gas. The shortage of gas has been precipitated by lower production in the offshore KG basin,which was expected to contribute up to one-quarter the gas supply for economy. Lower-than-expected output has increased the dependence on expensive,imported LNG liquified natural gas to fuel power and fertiliser plants,which directly impacts the economic viability of most of these units.

According to latest estimates,the output in the KG Basin D6 Block being operated by Reliance Industries has fallen to below 39 mmscmd after touching peak of 60 mmscmd in March 2010,and way below the planned peak capacity of 80 mscmd.

On Wednesday,following a meeting with private power sector developers,the PM Manmohan Singh agreed to putting in place a series of steps to augment coal supplies to the sector. The PMO is expected to hold consultations to firm up a plan of action within a month and a more comprehensive review is expected to be put in place over the next three months.