A ministers? panel on gas meeting here on Friday in the backdrop of output plunge at Reliance Industries? Krishna-Godavari gas field is expected to have a tough time, with several central ministries and states clamouring for additional gas for user industries.
As many as 12 states and several central ministries presiding over gas-consuming industries have written to the petroleum ministry for an additional 96 million standard cubic metres of gas per day (mmscmd). This is needed to fuel 20,000 MW of gas-based capacities proposed by state and central utilities, without any action plan in place.
Separately, the power ministry has requested 55 mmscmd for 14 projects coming up during the 11th Plan and another six in subsequent years. The fertiliser sector expects 13 mmscmd more, based on the current year?s demand.
Domestic gas availability has fallen from 140 mmscmd in 2010 mainly because of the fall in KG D6 output from the peak of 60 mmscmd to 37 mmscmd now. With consumption pegged at 165 mmscmd, there are already imports of LNG at levels much higher than 25 mmscmd over a year ago. Going forward, LNG?s share in India?s gas consumption is set to rise.
With domestic resources scarce, the empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee must find ways to cater to the needs of not only core sector customers in power and fertiliser sectors but also address the political constituency by providing fuel several state-sector projects. The flood of requests has come at a time when KG D6 gas production has fallen from a peak level of over 60 mmscmd in March 2010 to about 37 mmscmd now and is expected to fall further to 22 mmscmd by 2013-14.
?Gas requests have poured in from chief ministers and central ministers, which cannot be pushed under the carpet. In addition, requirements of core sector projects also needs to be met. It would be a tough ask for the EGoM,? said an official in the petroleum ministry.
The meeting?s agenda is to take stock of the existing situation on domestic gas and decide on new allocations, cancel some existing ones and suggest diversion in others and try to meet some needs of existing core sector customers. The group will also finalise a prescription to cut existing allocations, especially for merchant power plants and potassium and phosphorus-based fertiliser units.
?The government should have cleared the position earlier so that it was not flooded with request for gas allocation for the power sector. This could have also given some chance for projects to work out alternative fuel strategies,? said a private sector power producer asking not to be named.
As per the agenda notes, power sector has made the maximum requests. Apart from 11th Plan projects, it has also sent requests from state chief ministers and central ministers.
Haryana has sought 7.5 mmscmd for 1500 MW project in Faridabad, Puducherry 2 units for a 350 MW plant at Yanam, Uttarakhand 6 units for various projects, Punjab 4.5 units for a 1,000 MW project at Ropar, Andhra Pradesh for a 2,100 MW project in Karimnagar, Gujarat has also asked for gas for 702 MW Pipavav plant and 351 MW Hazira power plant, Kerala 5.4 mmscmd for a 1,200 MW plant at Cheemeni, Karnataka for a 1,400 MW project near Bangalore and a 2,100 MW project in Thaddadi and Maharashtra 5.4 units for expansion of existing gas based power plant at Uran.
Central ministries including heavy industries ministry and steel ministry has also sought gas projects of PSUs BHEL and SAIL. Department of Industrial Policy and promotion has requested 24 mmscmd of gas for six 1000 MW projects at different locations in Delhi-Mumbai Industrial Corridor (DMIC) area.