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Reliance Industries Ltd (RIL) has stopped supply of gas to 25 power plants from last Friday. With production from its Krishna-Godavari gas field (KG-D6) declining to 17.3 million standard cubic metres a day (mscmd), supply to fertiliser plants has also dropped.
Industry sources confirm a decline in supply to fertiliser plants dependent on KG-D6 and also to GAIL India's LPG (liquefied petroelum gas) extraction units. "By February end, production had declined to below 18 mscmd. So, RIL had to focus on priority sectors like fertiliser, cutting supply to 25 power plants. Because of a huge drop, even supply to fertiliser units were cut," said an industry source. The original allocation to these power plants was 28.9 mscmd.
Confirming the development, Ratnagiri Gas and Power Ltd managing director Manas Sarkar said it had been forced to stop power generation from March 1. "We were initially allocated 8.5 mscmd but in the last four months, supply has been negligible. For other plants, KG-D6 is a kind of alternative choice but we depend completely on the supply from there," said A K Garg, general manager.
For the past four months, the plant was being supplied an average of 1.1 mscmd. Because of this, the 1,900 Mw power plant was able to produce only 200 Mw during the period. A GAIL official added there had been a decline on the committed supply on 2.59 mscmd to its LPG extraction units since February end.
According to a PTI report, of the 17.3 mscmd given during the week, 15.2 mscmd was supplied to the top priority urea-making fertiliser plants and about two mscmd was consumed by state-owned GAIL India's LPG extraction units.
The KG-D6 fields began production in April 2009 and hit a peak of 69.43 mscmd in March 2010 before water and sand ingress led to the shutting of a third of the wells. This peak output of 66.35 mscmd from the Dhirubhai-1 and 3 areas, largest of the 18 gas discoveries in KG-D6, is now only 12-13 mscmd. Of the MA field, which had hit a peak of 6.78 mscmd in January 2012, it is now five mscmd.
When the gas production began to dip sharply, the government in 2011 ordered a proportionate cut in supplies to 25 power plants which had an original allocation of 28.9 mscmd of gas. But there was no cut in the 15.668 mscmd allocation to 16 fertiliser plants.
Sources said most of the power plants either had gas allocation from state-owned Oil & Natural Gas Corp or had arrangements for imported liquefied natural gas (LNG). With imported LNG costing three times the $4.205 per million British thermal unit price of KG-D6 gas, power companies are finding it difficult to operate their plants on the import.
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