Private power producers eye gas allocated to non-core sectors

Ahead of a meeting of an empowered group of ministers (eGoM) later this month, private power producers are pushing for priority in natural gas supply.

They want 18 mscmd (million standard cubic metres a day) of gas being supplied from nominated fields for non-core sectors to be shifted to priority sectors such as power and fertiliser units. They also want enough gas supply to enable all power plants to be able to work at 60 per cent plant load factor.

Natural gas supplies, even from privately run fields, are decided by the government. In a letter to petroleum and natural gas minister Jaipal Reddy, the director-general of the Association of Power Producers (APP), Ashok Khurana, has requested the government to “consider discontinuing gas to non-core sectors and use the same for core sectors”.

Gas-based power projects with a generation capacity of about 4,000 Mw are ready to commence operations by March 31 and are awaiting allocation by the eGoM, he said. Public money in the form of debt provided by various Indian banks and financial institutions is at a grave risk unless these projects start commercial operation by March 31, he added.

Total gas-based power capacity in India is 16,600 Mw and these plants currently consume 66 mscmd of gas. Their average capacity utilisation is around 70 per cent. The body also suggested that, “If the capacity utilisation of all these power plants is rationalised at 60 per cent or so, about 8-10 mscmd of gas will get released, which can be allocated to upcoming projects.”

The APP says power supply has deteriorated significantly and nearly 51 per cent of coal-based projects are operating with less than a week’s stock.

Reliance Industries has reported natural gas output from its eastern offshore KG-D6 fields dipping below 39 mscmd, as it had shut five wells because of high water ingress.

Production from the Dhirubhai-1 and 3 gas fields and the MA oilfield in KG-D6 was 38.43 mscmd in the week ended December 25. The output comprised 31.58 mscmd from the D1 and D3 gas fields and 6.85 mscmd from the MA oilfield. The KG-D6 production was 61.5 mscmd in March 2010 but a drop in pressure in the wells and increased water ingress had led to a lower per-well gas output.