The pecking order for natural gas utilisation drawn up by the petroleum ministry has accorded low priority to new power units in the country. The highest priority has been accorded to urea-based fertiliser units, followed by petrochemical units, new and existing LPG plants and city gas projects.
The natural gas utilisation policy, if accepted by the government, could prove a setback to the two new gas-fired power projects of the Reliance Anil Dhirubhai Ambani Group: the 7,500-mw Dadri project (UP) and 2,800-mw Shahpura project (Maharashtra).
NTPC?s 2,600-mw gas-based capacities at Kawas, Gandhar, Anta and Auraiya may also be affected by the policy. Even the Mukesh Ambani-controlled Reliance Industries Ltd?s plans for two gas-based power projects of 2,000 mw each at Haryana and Maharashtra for its proposed SEZs could also feel the impact.
The draft policy comes as fallout of the directions of the empowered group of ministers on gas pricing. The policy recommendations have echoed the suggestions of the Prime Minister?s Energy Coordination Committee, which said new power units should be coal fired so that the vast resources in the country were exploited with the use of latest technology.
The ministry?s draft policy pecking order says the shortfall of existing power plants should come next. However, this too will be conditional on the extent of investments made by the companies on these projects. Industries like sponge iron, refineries and others like steel, agro, cement, chemicals, automobiles and paper will be considered next for gas allocation.
The current supply of gas to the fertiliser sector is around 22 mmscmd and demand projections by 2011-12 are around 76 mmscmd. In the case of petrochemicals, against present supply of around 8 mmscmd, demand is expected to hit 22 mmscmd in 2011-12.
