The government has said that it would not alter its plan for distribution of initial gas output from Reliance Industries' [Get Quote] D6 field in the Krishna-Godavari (K-G) basin.

The proposed power plants, including the ADAG's Dadri project, would be considered when they were ready to begin production, it said.

The empowered group of ministers (EGoM) on gas headed by External Affairs Minister Pranab Mukherjee on Thursday decided that gas allocation from RIL's D-6 block will be made to power projects subject to availability and without prejudice to court decisions, according to a government release.

It has also decided that the existing demand from petrochemicals, refinery and steel industries, including the downstream units of RIL, will be taken up when there is an increase in production beyond 40 mscmd (metric standard cubic metres per day).

The EGoM, which met in New Delhi on January 8, noted that production from the D6 field was expected to reach its peak of around 80 mscmd by 2012 and start dwindling from 2017 till 2020. It concluded that decisions regarding commercial utilisation of this gas would have to be taken in the light of these facts.

The group observed that priority should be given to power plants in Andhra Pradesh. All other power plants connected to the field should also be given gas, it said.

Petroleum and power ministries would discuss the plant-wise requirement and the proposed supply, it said.

In view of softening naphtha prices, the EGoM asked the Department of Fertilisers to examine the viability of fertiliser plants by using naphtha instead of natural gas.

The EGoM observed that in order to enable fertiliser projects for conversion/expansion/de-bottlenecking/revival and based on the request of the Department of Fertilisers, GAIL has sent a term-sheet to fertiliser companies proposing to make supplies from any of the available sources, such as RIL's KG-D6 field, other Nelp fields and RLNG.

GAIL and fertiliser companies should finalise the term-sheets so that these projects could be taken up for implementation, it said.

It also decided that the actual requirement of gas for the Kakinada-Hyderabad-Uran-Ahmedabad pipeline, being constructed by Reliance Gas Transportation Infrastructure Ltd, would be met since the pipeline was critical for evacuation of gas from the KG-D6 field.