With Reliance Industries ltd (RIl)-operated KG-D6 fields repeatedly reporting diminishing gas output, Power Minister Jyotiraditya Scindia has pressed the panic button. In an urgent missive to Petroleum Minister M Veerappa Moily on May 6, Scindia sought immediate diversion of around 6 mmscmd (million metric standard cubic metre per day) of gas from non-core sectors to 57 gas-based power plants in the country.
Scindia went to the extent of saying that gas-based plants are facing acute shortage of the natural resource owing to "dwindling supply of KG-D6 gas, which has recently become zero for power sector".
The Power Minister reiterated the gravity of the situation by highlighting the fact that out of the 57 gas-based power plants in the country, 13 plants of around 5,000 mw are mainly dependent on supply from KG-D6 basin.
In order to reverse the trend of diminishing output of KG-D6 gas fields, RIl had announced earlier this week that it will invest around $5 billion to enhance production.
Mukesh Ambani-led RIl and its British partner BP Plc have submitted to the Petroleum Ministry, their plans to bring into production satellite fields in the eastern offshore KG basin block to raise output that they claim has plummeted to less than 16 mmscmd from about 64 mmscmd three years ago. In such a scenario, Scindia said that "large number of gas-based power plant are getting stranded and are on the verge of becoming non-performing assets on account of stoppage of supply from KG-D6 completely".
Apart from seeking diversion of 6 mmscmd of gas from non-core sectors, the Power Ministry has also urged the Petroleum Ministry to divert gas from ONGC fields.
At present, the installed capacity of gas-based power plants in the country is 18,714 mw which have a total requirement of about 72 mmscmd of gas to operate at 70 per cent to 75 per cent of plant load factor (PlF, which is the running capacity of a power plant).
Against this requirement, the actual gas supply to these plants as in March 2013, was about 27 mmscmd only, which is only sufficient enough to operate these power plants at average PlF of about 29 per cent.
The Power Ministry's request to the Petroleum Ministry for urgent gas supplies gains significance in the light of the fact that Scindia have repeatedly been seeking priority status for gas-based power projects on a par with gas-based fertiliser plants.
last month, the Power Minister had indicated that he wanted to meet Defence Minister AK Antony, who is the Chairman of the empowered Group of Ministers (eGoM) on gas pricing and commercial usage of gas in this regard.
At present, gas-based fertiliser plants get first priority in allocation of natural gas. These are followed by lPG-extraction units, while gas-based power plants come third in the priority list.
In March, heads of leading private power producers, including Anil Ambani of Reliance Power, GM Rao of GMR Group, GVK Reddy of GVK Group, and Madhusudhan Rao of lanco, had met Petroleum Minister M Veerappa Moily and Planning Commission Deputy Chairman Montek Singh Ahluwalia, seeking immediate gas supplies to their plants.
They had said that 15,000 MW of gas-based plants are getting gas supplies from domestic fields at less than 10 per cent of their operating capacity, making their operations unsustainable and unviable. In addition, 8,700 MW of new gas-based capacities are non-functional for want of gas.