Natural gas allocation will be a priority for govt

New Delhi, Jan 27 | Updated: Jan 28 2008, 05:46am hrs
Fertiliser plants will have the first right over domestic natural gas, followed by petrochemical and existing power units if the government approves a draft natural gas utilisation policy.

According to the draft prepared by the Petroleum ministry, natural gas produced from fields like eastern offshore KG-D6 field of Reliance Industries or Panna/Mukta and Tapti field off Mumbai, would first be given to the fertilizer sector as existing gas-based fertiliser units were running at less than designed capacity because of shortage of gas.

Priority would then be given to petrochemical units as they have a higher degree of gas price sustainability since their products sell at market prices. LPG fractionators would be given priority at the same level so that all fractions of natural gas utilised. The draft policy, prepared on instructions from the empowered group of ministers on gas, fixed third priority as existing gas-based power projects with PSU units being given first preference.

City gas projects retailing CNG for automobiles would follow in the priority list, as government was keen to cut vehicular pollution, the draft said, adding that other industrial users like steel and refineries would come afterwards.

New gas-based power units would stand sixth with the draft policy pointing out that the Energy Coordination Committee headed by Prime Minister Manmohan Singh had stated that new power units should be based upon coal so as to ensure exploitation of coal resources.

Official sources said the draft gas utilisation policy would soon be placed before the EGoM headed by external affairs minister Pranab Mukherjee for approval.

The draft states, Natural gas is to be viewed as multi-product wherein all the fractions of the gas are to be effectively and optimally utilised for arriving and deriving the maximum out of the gas.