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Rediff.com  » Business » RIL to supply KG basin gas to NTPC soon

RIL to supply KG basin gas to NTPC soon

October 27, 2009 16:55 IST

More than a month after it signed the contract for buying gas from Reliance Industries, state power utility NTPC Ltd is likely to finally begin drawing the fuel from KG basin field from this week.

"All requirements including providing bank guarantee have been met by NTPC and gas flow can start as early as tomorrow," an official said.

NTPC, which was allocated 2.67 million standard cubic meters per day of gas by the government from RIL's eastern offshore KG D-6 fields, had on September 23 signed Gas Sales and Purchase Agreements for less than one-fourth of the earmarked volumes.

The company will use 0.13 mmscmd of D6 gas at its Faridabad power plant in Haryana, 0.03 mmscmd at Anta in Rajasthan and 0.45 mmscmd at its Dadri unit in Uttar Pradesh.

The official said NTPC does not want to use RIL gas at its Kawas and Gandhar plants in Gujarat and has proposed swapping the allocations for these with the gas from Panna/Mukta and Tapti fields that goes to its plants in northern India.

The proposal entails partially diverting subsidised/PMT gas of NTPC's power plants in the northern part of the country to Kawas and Gandhar. The gas allocated to Kawas and Gandhar will then be diverted to NTPC's plants in the north.

The official said while Kawas was originally allocated 1.75 mmscmd and Gandhar 0.30 mmscmd, for the two plants to operate at a minimum 70 per cent of the capacity (Plant Load Factor), a combined 2.71 mmscmd gas would be needed.

So, 2.71 mmscmd of subsidised/PMT gas would be diverted from NTPC's plants in northern India to Kawas and Gandhar. An equivalent quantity would be moved from D6 to these plants in North India.

"Essentially, this would mean that gas allocation would have to be increased, which would be done," he said.

RIL had signed GSPAs for supplying 0.61 mmscmd of gas to the state-run firm's Anta, Dadri and Faridabad power plants.

However, due to constraints in state-run gas utility GAIL India Ltd's pipeline to transport KG-D6 gas, all of the 0.61 mmscmd would be consumed at Anta plant for the time being.

The state-run firm is unwilling to use D6 gas at Kawas and Gandhar plants as it is seeking fuel for expansion projects at those sites from the Mukesh Ambani firm at $ 2.34 per mmBtu rates committed in the 2004 tender.

RIL is currently producing about 42 mmscmd of gas from KG D-6. Of this 14.45 mmscmd is being supplied to fertilizer plants and 22.57 mmscmd to power plants.

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