Reliance Industries [Get Quote] has scrapped a Rs 1,500 crore (Rs 15-billion) captive power plant after the government decided to allocate gas from its eastern offshore fields to existing power and fertiliser plants only.

RIL had proposed to set up a 345 MW power plant at Nagothane in Maharashtra for captive use and was wanting to pipe its KG basin gas to the plant.

The empowered group of ministers, however, decided to allocate the initial 40 million standard cubic metre per day of gas from KG-D6 basin to the existing power and fertiliser plants and proposed units like the captive power plant at Nagothane did not figure in the scheme of things.

A company spokesperson confirmed the scrapping of the project.

"In view of EGOM's decision to prioritise gas allocation to the existing consumers under the gas utilisation policy, we had to cancel the setting up of a captive power plant in Nagothane," Reliance Industries spokesperson said.