Govt firms to get priority in KG gas allocation

The government will give priority to companies it owns while deciding on the allocation of gas from the KG basin, a senior official said today.

Nevertheless, hope among the power and fertiliser companies in the private sector is running high. “This is the greatest news I have heard today (lifting of ban on sale of KG basin gas). We can now see gas flowing. We have been suffering for the last three years due to non-availability of gas. We are told that we will be able to meet 70 per cent of the gas requirement and this is enough to declare our projects commercial. We will be ready to operate within a week of getting the gas supply,” said Issac A George, Chief Financial Officer, GVK Power and Infrastructure Limited.

GVK Power needs 1.1 million standard cubic metre gas per day (mscmd) for Phase II of the 228-Mw project at Jegurupady and 1.196 mscmd for the 464-Mw project of Gautami Power Limited.

GMR Energy, which has a 388-Mw plant in Andhra Pradesh, is also running at 43 per cent PLF (plant load factor) due to lack of gas. “We hope to get the gas by March-end,” said Raaj Kumar, CEO of GMR Energy.

The empowered group of ministers (EGoM) in its meeting early this month had decided to give priority to the fertiliser sector, power sector and city gas distribution (in that order) in allocation of gas.

Commenting on today’s Bombay High Court order, Petroleum Secretary R S Pandey said, “Fertiliser and gas-based power plants in Andhra Pradesh will be given priority. We will have to discuss this with the power ministry.” According to government sources, the EGoM had decided that while power plants in Andhra Pradesh would be given gas at 70 per cent PLF, others will get gas at 60 per cent PLF.