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EGoM Meeting on Changes in Gas Allocation Postponed

  • The EGoM meeting, the first in more than 18 months, was to consider changes in gas allocation in view of sharp drop in output from Reliance Industries’ (RIL) eastern offshore KG-D6 blockA meeting of the Empowered Group of Ministers (EGoM) headed by finance minister Pranab Mukherjee that was scheduled for 14th February to consider changes in the natural gas allocation policy, has been postponed, reports PTI.“There is no written communication but we have been verbally told that the meeting will not happen on 14th February,” an oil ministry official said.No new dates have been fixed.The EGoM meeting, the first in more than 18 months, was to consider changes in gas allocation in view of sharp drop in output from Reliance Industries’ (RIL) eastern offshore KG-D6 block.
  • The oil ministry had proposed to the EGoM to stop gas supplies to power producers that do not sell electricity at regulated tariff and cancel allocation to a few merchant power plants in Andhra Pradesh that currently sell electricity at way above the tariff determined by the sector regulator.Also, it proposes making future gas allocations to only urea fertiliser plants and fuel supply to phosphates and potassium fertiliser producers be stopped.KG-D6 gas output has fallen to below 39 million metric standard cubic meters per day (mmscmd) after touching peak of 60 mmscmd in March 2010, prompting the ministry to suggest changes in the allocation policy.
  • The official said the requirement of 13.22 mmscmd of gas for urea plants beyond 15.7 mmscmd that has already been allocated from KG-D6, would be placed before the EGoM.Similarly, the requirement of 31.81 mmscmd gas for 14 power plants with a total capacity of 7,219.5 MW that are to be commissioned in 11th Five Year Plan period ending 31st March would be placed before the ministerial panel.Currently, power plants have been allocated 32.67 mmscmd of KG-D6 gas.Also, the admissibility/quantum of marketing margin charged by RIL on sale of KG-D6 and the oil ministry’s decision to ask the Petroleum & Natural Gas Regulatory Board (PNGRB) to regulate marketing margins would be placed before the EGoM.
  • The power ministry’s proposal to ask RIL to sign an agreement to supply 2.16 mmscmd of gas to NTPC may also figure in the EGoM meeting whenever it is next scheduled, the official said.RIL not signing pact for supply of 2.74 mmscmd of gas out of the 4.46 mmscmd of allocated to five power projects may also figure in the EGoM meeting whenever it is scheduled next, the official said.RIL had not signed Gas Sale Purchase Agreement (GSPA) for 2.74 mmscmd including 2.16 mmscmd to state-owned NTPC, in view of falling KG-D6 output.

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