Govt not to alter gas allocation from RIL's KG-D6 field

The government has refused to change allocation of the initial gas output from Reliance Industries' (RIL) eastern offshore KG-D6 field and will consider giving fuel to proposed power plants, including Anil Dhirubhai Ambani Group's (ADAG) Dadri project, when these plants are ready to begin production.

An Empowered Group of Ministers, last week, decided that "subject to the availability of gas, necessary allocations from KG-D6 fields will be made to projects in the pipeline, including Dadri power project, as and when they are ready to commence production.

"This will be without prejudice to the decisions of the court cases," the EGoM, headed by External Affairs Minister Pranab Mukherjee, said.

ADAG has claimed rights over 70 per cent of the initial output of 40 million cubic meters per day (mmscmd) from the KG-D6 expected this year, by virtue of a family split. It wants 28 mmscmd gas from KG-D6 field for Dadri plant at $2.34 per million British thermal unit (mmBtu), rates lower than the government approved sale price of $4.20 per mmBtu and has taken the Mukesh Ambani firm to court for performance of the contract.

Sources said the EGoM decided that 14 mmscmd gas from the initial output would go to fertiliser units. Thereafter, existing power plants will get 18 mmscmd, including up to 8.5 mmscmd to beleagured Dabhol power plant.

The EGoM on January 8 decided that within the allocation for power sector, plants in Andhra Pradesh would be given priority. It asked the Power Ministry to work out individual plant allocations.

Reliance is expected to reach a plateau of 80 mmscmd by 2012, which will start dwindling from 2017 onwards till 2020. If Dadri project comes by then, it may be allocated gas, the sources said.