State-run NTPC, Essar Power and Torrent [Get Quote] are among the firms identified by the Union power ministry for buying natural gas from Reliance Industries' [Get Quote] eastern offshore D6 block.

The power ministry identified the likely users of the fuel in line with the gas utilisation policy approved by the government in June this year, official sources said.

The policy made it mandatory for Reliance to first supply gas to the existing gas-based urea plants and then give 3 million standard cubic meters per day to LPG plants.

Thereafter, up to 18 mmscmd of gas was to be given to gas -based power plants that were lying idle/under-utilized or are likely to be commissioned during 2008-09.

Accordingly, the ministry wants Reliance to supply 7 mmscmd gas to NTPC's power plants in western and northern India, they said.

Essar's plant in Gujarat has been identified to receive between 0.61 and 1.81 mmscmd gas, while Vemagiri plant in Andhra Pradesh is to get up to 1.02 mmscmd.

Torrent's yet to be commissioned Gujarat plant has been identified to get between 2.13 and 2.63 mmscmd gas. In all seven existing plants of NTPC and eight units in the state sector were identified to receive Reliance gas.

Besides, 11 plants in private sector were also identified. The plants likely to be commissioned in 2008-09 and those running on liquid fuel and can switch to natural gas were also identified.

Gas would be sold to identified companies at government approved rate of USD 4.21 per million British thermal unit, sources added.

An Empowered Group of Minister (EGoM) had in June decided that gas producers "would sell gas to consumers in accordance with the marketing priorities determined by the government."

For Reliance, which is to produce gas from its eastern offshore KG-D6 field from September, the EGoM decided that the gas will first go to fertiliser units, LPG plants, existing power plants and city gas distribution in that order.

Reliance is to produce 25 million standard cubic meters per day of gas from September that would scale up to 40 mmscmd by March 2009.

The EGoM decided that all gas produced from areas awarded under New Exploration Licensing Policy (NELP) like KG-D6 of Reliance, would have to sell the fuel "in accordance with the marketing priorities determined by the government" -- first gas-based urea plants, LPG plants, gas-based power plants or liquid fuel plants in that order.

A maximum quantity of 5 mmscmd would be made available to city gas distribution projects for supply of piped natural gas to households and compressed natural gas in transport sector.