With an empowered ministerial panel all set to discuss the Petroleum Ministry's proposal of abolishing the existing priority allocation of gas to the fertiliser sector and giving first preference to the power sector on July 17, high profile companies like Reliance Power, lanco, GMR and GVK - whose gas-based power plants are stuck owing to lack of optimum availability of the natural resource - have begun parleys with the Petroleum Ministry in anticipation of a positive decision.
Anil Ambani, whose Reliance Power has a 7,480 mw gas-based power plant in Dadri (Uttar Pradesh) which has been in limbo mainly due to lack of gas supply, held a meeting with Petroleum Minister M Veerappa Moily earlier this week apparently to discuss the possibility of getting any positive decision in the meeting on prioritising gas supply to stalled gas-based power plants including his own.
Apart from Reliance Power, other gas-based power plants which have been lying idle owing to shortage of the natural resource are GMR's Vemagiri plant (370 mw) and barge-mounted (237 mw), GVK's Jegrupadu Extension (220 mw) and Gauthami (464 mw), Konaseema Gas Power (445) and lanco's Kondapalli Stage-II (366 mw).
Ambani's meeting with Moily this week had been preceded by a delegation level meeting with the minister earlier in March this year, when along with the Reliance Power chief, G M Rao of GMR Group, G V K Reddy of GVK Group and Madhusudan Rao of lanco, had also met him seeking urgent provision of gas for their stalled plants.
During the March 2013 meeting, these companies had sought allocation of gas on priority basis for the power sector at par with the fertiliser sector on the basis of the fact that across the country 15,000 mw of gas-fired plants were getting gas from domestic fields for only 10 per cent of their requirement thus making their operations unviable. In addition to this, the delegation had apprised Moily then that 8,700 mw of new gas-based capacities in the country were stranded without gas.
Subsequently the Petroleum Ministry had begun parleys within the Government over the issue of re-prioritising gas allocation and Moily had indicated that the issue should be taken to the empowered Group of Ministers (eGoM) which is headed by Defence Minister A K Antony. In this scenario, the July 17 meeting of the eGoM assumes significance as even the gas prices were hiked last week by the Union Cabinet according to the formula suggested by the Rangarajan panel despite stiff opposition from the Fertiliser and Power Ministries.
Also the Petroleum Ministry's proposal seeking abolition of priority allocation of gas to the fertiliser sector, which it has prepared for the eGoM meeting, has been rejected by the Fertiliser Ministry which has already sent an adverse note on it. Amid all this, as reported by The Pioneer last week, the Power Ministry is also preparing a cabinet note for seeking urgent allocation of 6 mmscmd gas for itself from the Petroleum Ministry for reviving several gas-based power plants.
In May Power Minister Jyotiraditya S+cindia in a letter to Moily had sought the said amount of gas, suggesting that it could be sourced from non-core sectors. This move too, according to sources, has irked the Fertiliser Ministry and all these developments are leading to a possible face-off between the Petroleum, Fertiliser and Power Ministries in the coming days.