Ratnagiri to get Reliance’s D-6 gas

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New Delhi, Nov 6 : to 55 mmscmd by July 2009.

Officials said that in view of the high RLNG prices as also the uncertainty regarding supply of RLNG, the option of supplying indigenous gas to be produced from RIL’s KG-D6 field to RGPPL has been be considered. Presently, as against its demand of 8.5 mmscmd, RGPPL is being supplied around 5.4 mmscmd (equivalent to 1.5 mmtpa) of regassified LNG, which is sourced by Petronet LNG Ltd from RasGas of Qatar. However, PLL’s contract with RasGas Qatar for supply of 1.5 mmtpa is only till September 2009. Also, the quantity is only sufficient to meet the requirement of two power blocks of RGPPL.

On the ministry of power’s request to allocate gas from RIL’s D6 gas field to six power plants of NTPC (with a requirement of 7 mmscmd), the eGoM have directed the ministries of power and petroleum to work out details of gas supplies to power plants after the requirements of Ratnagiri and the power projects in Andhra Pradesh are met.

“EGoM considered the proposal regarding the supply of 18 mmscmd earmarked for the power sector to various power plants and noted that after RGPPL priority should be given to the Andhra Pradesh power plant. The power and the petroleum ministries would hold discussions to arrive at a mutually acceptable decision and decide on the supply of natural gas to various power plants. In case of any difficulty in arriving at a decision, the issue would be brought again before the eGoM,” said a senior government official who was part of the eGoM meeting.

RGPPL is presently being supplied RLNG at a pooled price of $5 per mmbtu. Justifying the supply of domestic gas to RGGPL, officials explained that the present price of around $ 8.5/mmbtu for the 1.5 mtpa of RLNG is valid only till December 2008 and the price for the remaining period of the contract (January-September 2009) would be re-negotiated and is likely to be around $ 16/mmbtu.

“Therefore, the pooled price is likely to increase from the present $5/mmbtu to $7.8 to 8.5/mmbtu in the period from January to September 2009. If PLL contracts RLNG for gas supply for RGPPL’s third block as well, this would be at the prevailing high international prices, thereby pushing up the ex-terminal pooled price even further to $ 9.2 mmbtu in January 2009, which would subsequently increase every month,” the official said.