AP power projects likely to get additional fuel from April

Reliance Industries Limited (RIL) has cleared the request of the state government for supply of additional quantum of natural gas through a swapping deal to partly utilise the idle capacity of the private gas power stations for meeting the needs of industry..

“The company has given clearance for supply of 2.5 mmscmd (million metric standard cubic metre per day) of natural gas through swapping of re-gasified liquified natural gas (RLNG) on Friday,” said a source.

Under the arrangement, the state government will bear the cost of RLNG, to be used by the existing consumers of RIL on the western coast, and utilise the natural gas supplies meant for those consumers for power generation in the state.

AP Transco chairman and managing director, Ajai Jain, said the power generators were likely to start utilising one mmscmd of natural gas from April 1. He said it took some time to resolve the issues raised by Reliance Gas Transport Infrastructure Limited (RGTIL) for the proposed swapping arrangement.

“This arrangement was sought as part of the state government’s commitment to meet the power requirement of small industries during the summer period,” a senior energy department official told Business Standard.

The government will facilitate an additional generation of 225 Mw of power exclusively for small industries by utilising one mmscmd of natural gas. “We wanted to begin this as early as on March 2 but it is coming after almost a month owing to certain issues,” the official said.

It may be recalled that the company had reportedly cited the falling pressure in the RGTIL-operated pipeline that carries natural gas to the western coast from Kakinada as a problem to oblige the state government’s proposal.

The government will incur a cost of Rs 9 per unit of power as against around Rs 2.30 per unit currently paid to the gas power projects as the price of fuel will be equivalent to that of RLNG as per the swapping arrangement, according to the officials.

The government had to make this tough choice after the small industries associations represented to the government stating that they cannot sustain the business if they are subjected to power holidays. One of these associations had also threatened to declare lockouts if the additional power is not made available to their units in these summer months.

The remaining 1.5 mmscmd of natural gas will be utilised depending upon the overall power supply situation in future, according to Jain.

Currently, the gas power projects in the state are receiving about 10 mmscmd of gas from the K-G Basin, which is sufficient to generate power at half of the installed capacity.