Reliance cuts gas supply to non-core customers
KG-D6 output at 15 lower than last year at 50 mmscmd.
Reliance Industries RIL on Monday restricted natural gas supply to non-priority customers like petrochemical units,refineries and steel makers,including some of its own units in order to comply with the recent oil ministry directive to meet the requirements of priority sectors such as power and fertilisers first.
Sources said that the company has started complying with the ministrys advice from Monday morning. RIL,however,did not offer any comments on the development. An email sent to RIL remained unanswered at the time of going to press.
Any gas left after meeting priority sectors 47.6 million cubic meters per day mmscmd of contracted demand would go to users in steel,refineries and petrochemical sector.
Apart from power and fertiliser,other priority customers are LPG extraction units and city gas distribution companies.
RIL is now producing only about 50 mmscmd of gas from the D6 field in the Krishna Godavari basin,about 15per cent lower than what it produced in the middle of 2010. This is just enough to meet the needs of the priority sector,and accounts for four-fifth of the original firm allocation of 63.3 mmscmd to all sectors from the D6 fields.
As output fell,RIL cut down supplies proportionately across the board to all consumers. This forced users in the priority sector to complain to the petroleum ministry,forcing it to take up the matter with RIL.
Chemicals and fertilisers minister MK Alagiri said that the 8-10 per cent cut in gas supply to fertiliser plants since December last year would lead to higher fertiliser subsidy requirement or an increase in the price of urea,the most commonly used fertiliser.
The petroleum ministry asked RIL to supply the full allocated natural gas from its D6 field to power and fertiliser sectors without fail even if it requires stopping supplies to non-priority customers like refineries,steel makers and petrochemical producers. The ministrys advisory insisted that the company has to follow the governments natural gas utilisation policy,which lists various user industries as per priority,as the government is the supreme decision maker in the pricing and allocation of this fuel.
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