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Govt allows clubbing of fuel supplies to units of same firm

Jan 03 2013, 20:47 IST
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Reliance Industries KG-D6 Reliance Industries KG-D6
SummaryIn view of fall in output at Reliance Industries the government has allowed companies to club fuel supplies.

In view of fall in output at Reliance Industries KG-D6 field making operations at power plants unviable, the government has allowed companies to club fuel supplies of two or more units at one plant.

"The Ministry of Petroleum and Natural Gas has notified guidelines for clubbing/diversion of allocated gas between two or more power plants of same entity (the ownership structure of the power plants involved in clubbing/diversion must be identical) so as to improve the plant load factor (or capacity utilisation) and corresponding increase in total generation of electricity," an official statement said.

The order, it said, was issued considering the fact that many power plants in the country were operating at low Plant Load Factor (PLF) due to acute shortage in availability of domestic gas leading to inefficient production of electricity.

KG-D6 gas output at about 20 million standard cubic meters per day is one-third of the allocations made.

"The clubbing/diversion, in all spells, should not be for a period of more than a year in total and clubbing/diversion of gas should lead to higher production of electricity compared to pre-clubbing arrangement," the statement said.

The cost of the gas, so diverted, would be in accordance with the price based on the source of the diverted gas so that there is no financial burden on the end consumers.

"The entity seeking clubbing/diversion would bear any additional financial liability arising from the existing and future Gas Sale Agreement(GSA)/Gas Transport agreement(GTA) and any other swapping transaction resulting there from and the end-use of the diverted gas would remain the same i.e. supply of power to State Discom," it said.

The power plants would, therefore, have to obtain no objection from the concerned power distribution company (discom) to which they are supplying electricity (pre-clubbing /diversion) and the Ministry of Power shall operationalise the arrangement.

This step should help many power plants operating at low capacity in improving their power generation.

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