RIL stops supplies to power plants; minister wants EGoM meet

Reliance Industries Ltd (RIL) has stopped gas supplies to power plants after output of its KG-D6 block hit an all-time low, prompting Power Minister Jyotiraditya Scindia to press for convening an urgent meeting of a ministerial panel to rework allocations.

Last month, output of RIL's KG-D6 block fell to 16.46 million standard cubic meters per day, not even sufficient to meet the requirement of urea-manufacturing fertiliser plants and LPG plants, and left no gas for power plants that are placed third on the supply priority list.

RIL, which was supplying a little less than 1 mmscmd of gas to power plants in February, completely stopped giving fuel to them in March, official sources said.

With at least 13 plants having aggregate electricity generation capacity of 5200 megawatt shutting because of lack of gas from KG-D6, Mr Scindia has asked A K Antony, chairman of the Empowered Group of Ministers (EGoM) on 'gas pricing and commercial utilisation of gas' to immediately convene a meeting of the panel to address the extraordinary situation.

The Power Ministry wants that the sector be given the same status as fertiliser and whatever supplies of gas is available from KG-D6 should be pro-rata distributed among the two, they said.

Currently, fertiliser sector is accorded top priority, followed by LPG producing plants and power stations. This means that gas will be made available in full to the top priority sector first. LPG plants requirement will then be met and power sector thereafter.

Supply cuts will be imposed on sectors listed at the bottom of the priority list first, and moving upwards with further drop in supplies.

Sources said that when KG-D6 gas production began to dip sharply, the government in 2011 ordered a pro-rata cut in supplies to 25 power plants which had an original allocation of 28.90 mmscmd of gas. But there was no cut in the 15.668 mmscmd allocation to 16 fertiliser plants.

Now there isn't any gas left for them as KG-D6 output dipped to 16.46 mmscmd which was consumed by fertiliser plants (14.79 mmscmd) and LPG sector and gas pipeline (1.67 mmscmd).

Power Ministry, they said, wants the current output to be pro-rata distributed among fertiliser and power plants.

The KG-D6 fields, which began production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress shut down of more than one-third of the wells.

This peak output comprised of 66.35 mmscmd from Dhirubhai-1 and 3, the largest of the 18 gas discoveries on the KG-D6 block, and 3.07 mmscmd from MA field, the only oil discovery on the block.

D1&D3 output has since fallen to 12.29 mmscmd while gas production from MA field, which had hit a peak of 6.78 mmscmd in January 2012, has fallen to just about 4.18 mmscmd.