EGoM allocates additional 20 MMSCMD of gas from KG D6

Oil and gas major Reliance Industries Limited (RIL), led by industrialist Mukesh Ambani, today welcomed the decision taken by the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee to allocate an additional 20 MMSCMD of gas on a firm basis from the company's Krishna Godavari (KG) D6 block.

At its meeting here today, the EGoM also allocated another 30 MMSCMD of gas on a fallback basis from the block.

"With the additional allocation, we will be able to increase and maximize production for the benefit of all stakeholders. The additional allocation will also increase the overall customer base for supply of gas thereby avoiding frequent changes in the production level from the block," a spokesperson for RIL said.

For the first time, the EGoM also allowed RIL to use the gas from the block for its petrochemical plants at Vadodara in Gujarat and Nagothane in Maharashtra and for its refinery in Jamnagar.

The EGoM had earlier made allocations for 40 MMSCMD of the initial production from the block to various customers in the fertiliser, power, LPG, CGD and steel sectors.

Today's allocations are basically for consumers in the power, petrochemicals and refining sectors.

The public sector NTPC and other power producers will get more than 34 MMSCMD of gas now, in addition to the 18 MMSCMD given to them earlier. These are expected the power plants, many of them in Andhra Pradesh, to operate at higher plant load factors than at present.

The refineries, including that of RIL, will get 5.384 MMSCMD of gas on a firm basis and an additional 6 MMSCMD when the production from KG D6 increases to the projected 90 MMSCMD on a sustained basis.

RIL has got 1.918 MMSCMD for its petrochemical plants. The EGoM allocated 0.178 MMSCMD to non-urea subsidised fertiliser plants and 0.44 MMSCMD to steel plants.

"Based on technical assessment provided by the operator, production (from KG D-6) will reach 60 mmscmd by December," Pandey said adding the firm allocations would begun to flow by then.

RIL had in August this year written to the Ministry of Petroleum and Natural Gas urging it to allocate more gas from the KG D6 block to customers so that the production could be raised in line with the approved development plan.

The letter was sent after allegations by Reliance Natural Resources Ltd (RNRL), headed by Mr Mukesh Ambani's estranged younger brother, that RIL was producing less gas from the block to create an "artificial scarcity" that could lead to "windfall profits" for the company.

The letter said RIL had been flooded by requests for supplies which it had been taking up with the Government for allocations to these consumers as it continues to ramp up production to the maximum level in accordance with its development plan.

"Holding back production at this stage, after having made huge investments would be disastrous not only for the project but for the country as whole," RIL said.

RIL is the operator of the KG D6 block in the Krishna Godavari basin, having won the exploration contract for the block in partnership with Niko Resources of Canada. RIL owns a 90 per cent stake in the project while Niko holds the remaining 10 per cent.

NNN