The government plans to further prune the list of power projects identified for priority allocation of domestic gas in the wake of perceived shortage in production, especially from Reliance Industries? Krishna-Godavari D6 block. The move could impact the fortunes of 10 power projects ? including those of the biggest players in the sector like Reliance Power, Torrent, Lanco, GMR and GSPC ? which featured in the priority list of the power ministry last year. All these companies have committed to complete their respective projects in record time, by the end of 11th Plan, to get allocation of domestic gas.
?The ministry of power has asked all the companies on its priority list to provide specific time frames by which their plants would get final environmental clearance. Based on this information, the ministry proposes to remove a few projects from the initial priority list which will be given to the petroleum ministry for gas allocation,? said a government official privy to the development.
?Those projects whose environment clearance process has either not begun or are at a very initial stage could be dropped from the priority list,? the official added.
With output from domestic gas sources falling below expectations, the ministry is re-drawing the list. RIL?s KG D6 block, which was supposed to generate 80 mmscmd of gas this year, has reduced production to below 60 mmscmd.
The group of ministers (GoM) on gas allocation had provided fuel linkages to existing and stranded power and fertliser plants based on this level of output in 2009. With production of gas falling below the expected levels, even these projects are finding hard to get their full quota of gas.
The GoM is expected to meet again now to allocate gas to the next set of customers (new power plants and other fertiliser units). But its meeting was postponed several times last year as there is no clarity on gas availability for allocation to new projects. ?We expect that production of KG basin gas will improve in the coming months and more gas will be available from ONGC?s blocks. Still, availability will be lower than expectations. So, allocation has to be done judiciously,? said a petroleum ministry official.
On its part, the power ministry has already got the projects of priority list companies examined by Central Electricity Authority (CEA) to ascertain their level of preparedness for completion by March, 2012. In a recent report presented to the power ministry, CEA said that while work on all 10 projects is moving quickly, a few projects were progressing slowly. The delay in getting environment clearances and scheduling equipment supply could push projects to the 12th Plan period. As per the CEA report, Reliance Power?s 2400 MW Samalkot project in Andhra Pradesh has made impressive progress with its 1200 MW units already getting environment clearance. Clearance for its remaining 1200 MW is expected shortly, with TOR already cleared. Equipment has been ordered and the company is in full possession of land needed for the project. But RVK Energy is yet to get MoEF clearance for its 436 MW gas project in Andhra Pradesh, with CEA noting that strict monitoring will have to be done to complete the project during the 11th Plan period. Similarly, the 100 MW Panduranga project has secured clearance for its project from state-level environment impact assessment authority, but is yet to get it approved by MoEF. One of the units of the 1200 MW DGEN project of Torrent Power also needs MoEF nod. Apart from the projects mentioned earlier, private sector power utilities awaiting gas supply for their new projects include GSPC?s 700 MW Pipavav power project, Gujarat State Energy Generation Ltd?s 350 MW project at Hazira, Pragati Power Corporation?s 1,000 MW Bawana power project, Lanco?s 740 MW Kondapalli Phase III, GMR?s Vemagiri expansion project, Uttarakhand?s Kashipur project. In all, the 10 projects need about 30 mmscmd of gas to run plants at 70-75% of capacity. The government has projected that gas availability will increase from present 142 mmscmd to 152 mmscmd by 2011-12 and further to 186 mmscmd.
On an expected output of 60 mmscmd from D6, the government has already made firm allocation of 63.715 mmscmd. Now, the power sector gets 31.1 mmscmd and the fertiliser sector gets 15.5 mmscmd, while the rest goes to sectors like petrochemicals and city gas distribution.
