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Power Sector Honchos Seek Natural Gas on Priority Basis

Urge Centre to reform debt-ridden state electricity boards

  • Leading power sector honchos on Wednesday met the Principal Secretary to the Prime Minister, Pulok Chatterjee, and demanded that steps be taken to address their long-pending demands, including immediate allocation of gas to all the projects recommended by the Power Ministry, reforms in the debt-ridden state electricity boards and priority in gas allocation to power and fertilizer sectors in the XII Plan.
  • They also sought an assurance that gas may be given to the remaining projects which will be completed in 2012-13, including preferential allocation of natural gas as recommended by the Saumitra Chaudhuri Committee on natural gas price pooling.
  • They also urged the PMO to issue a clear directive that no further gas-based capacity would be considered for allocation until existing XI Plan gas demand was fulfilled from domestic gas ramp-ups and long-term gas supply agreements to be signed (in line with government directive for coal) and bulk LNG imports to be undertaken to fulfil the short-term demand.
  • Emerging out of the meeting, Association of Power Producers (APP) Director-General, Ashok Khurana said Mr. Chatterjee agreed with the proposal given by the delegation and assured that the recommendations made by them would be addressed immediately.
  • At present, almost all of the 35 million standard cubic metres per day (mscmd) of gas output from KG-D6 field is consumed by priority sectors of fertilizer and power, over 7 mscmd of gas produced by state-owned ONGC is being supplied to non-priority sectors.
  • Those who met Mr. Chatterjee included Reliance Power Chairman Anil Ambani and Tata Group Chairman-designate Cyrus Mistry.
  • The power sector leaders urged the government to snap gas supplied by ONGC to non-priority sector. They wanted a pool to be created for the gas thus freed and the about 25 mscmd of KG-D6 gas supplied to the power sector.
  • Interestingly, the EGoM will be struggling to allocate gas as the demand for more power comes amid projections by RIL that output from KG-D6 will dip to 27 mscmd next fiscal and to about 22 mscmd in the year thereafter.
  • The leaders also met Planning Commission Deputy Chairman Montek Singh Ahluwalia.

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