Essar Steel India Ltd has moved the Supreme Court seeking a direction to the government to introduce a universal gas-pooling policy to ensure adequate supply of gas to stranded gas-based plants in the country.
It wants that the policy should take within its ambit gas supply from all sources like domestic, long-term, short-term and spot RLNG, and thereby, create an enlarged pool of gas supply. This, according to the company, will ensure availability of gas to stranded plants in the steel, power and fertiliser sectors.
Essar in its fresh application filed recently said that the Centre should be asked to have a similar policy for the steel sector like the recently introduced “Approval to innovative mechanism for utilisation of stranded gas based generation capacity” for the power and the fertiliser sectors. “No policy has been introduced, which extends to the steel sector, and thereby, gas based steel plants, such as the petitioner’s, are continuing to be caused grave prejudice.
Applicability of the gas supply and pooling policy to the steel sector will aid in unlocking the stranded value in gas-based steel plants, which have been set up on the assurance of an affirmed gas supply, and had in fact been granted prior firm allocation by the Gas Linkage Committee,” the application stated.
According to Essar, it had prior firm allocations and on that basis it had made large-scale investments but still they are being denied gas, while entities with no assurance or prior allocation are being supplied gas. “Such a practice is arbitrary and discriminatory,” the application said.
It claimed that it is facing extreme financial and commercial duress due to non-availability of gas for its 10 MMTPA gas based sponge iron/steel plant, set up in Hazira.