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Gas Output from KG Basin Likely to Come Down Further

  • All indications are now pointing towards further drop in natural gas supplies from the KG basin and the expansion projects of gas based independent power projects and new ones coming up are set to land in trouble.

  • DROP IN POWER GENERATION

  • According to a recent communication of the Power Ministry basing on the information from the Union Petroleum Ministry, gas output will come down further resulting in drop in power generation from gas plants, majority of them based in Andhra Pradesh and they have been asked to put off their expansion. According to estimates, gas output from the KG basin is likely to come down further from about 35 mmscmd to 27 mmscmd, leading to further drop and there is not much hope from NELP gas in the near future.

  • NEW PLANTS

  • The situation is unlikely to get any better until 2014-15. That means, any plans for expansion of gas plants need to be reconsidered and new plants deferred.

  • This news does not augur well for the Andhra Pradesh Government where the peak demand today was up at 304 million units per day, leaving a demand supply gap of about 45 MUs. The energy demand has shot up lately.

  • The State has an installed capacity of about 2,700 MW of gas-based plants. Of this, the Government had allocated for 75 per cent capacity. Even this was functioning at about 48-50 per cent due to inadequate gas supply.

  • With the gas output stated to get lesser, the State would fall short of by another 500-700 MW as supply dwindles.

  • Meanwhile, several expansion projects of IPPs are likely to be affected.

  • However, it is to be seen whether fresh gas allocation made to IPPs by diverting from other sectors to help generate additional power. It is also not clear how the plants which are being commissioned will meet their gas requirement.

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