Power Min concerned over gas shortfall from RIL's KG-D6

Power Ministry has expressed concern over the fall in natural gas production at Reliance Industries' eastern offshore KG-D6 fields as the shortfall may hit electricity generation this summer.

Earlier this week, the ministry had written to the Oil Ministry pointing out that power plants are getting less than allocated gas from KG-D6.

"The short supply of gas by Reliance to the power projects is a matter of great concern mainly due to the huge requirement of electricity during summer season," it said.

Natural gas production from KG-D6 has fallen to 47.5 million standard cubic metres per day (mmscmd) from 61.5 mmscmd output the block had achieved in March 2010. This fall has led to Reliance making a pro-rata cut in supplies of all its customers.

The ministry said only 24.5 mmscmd of gas was supplied to power plants in February as against allocation of 33 mmscmd on firm as well as fall back basis.

The short supply, it said, may be "construed as non compliance of the decision of the EGoM".

An Empowered Group of Ministers (EGoM) has allocated natural gas from KG-D6 fields to users in sectors like power and fertiliser. Based on the EGoM allocation, Reliance has signed up contracts to supply 60.76 mmscmd of gas on firm basis to users in fertiliser, power, steel, LPG and city gas.

"It is requested to kindly furnish the report of supply of KG-D6 gas by Reliance to existing power plants on firm basis and also on fall back basis as decided by EGoM," the Power Ministry said. "The reason for short supply may also be given for the same and also take remedial measures to restore the supply as approved EGoM."

Reliance is currently producing about 39 mmscmd of gas from Dhirubhai-1 and 3 (D1 and D3) fields in the KG-DWN-98/3 or KG-D6 block off the east coast. Besides, another 8 mmscmd is produced from the MA field in the same block.

Gas sales as on March 26 were about 47.5 mmscmd, out of which about 12 mmscmd was sold to fertiliser plants and 24 mmscmd to power plants. The remaining 11.5 mmscmd gas is being consumed by other sectors such as sponge iron plants, LPG, city gas distribution and petrochemical/refinery.

Reliance has projected that gas output from D1 and D3 gas fields will fall further to 38 mmscmd in 2012-13.