Facing flak for slashing natural gas supplies to fuel-starved power plants across the country so that requirement of one station in Maharashtra can be met, the Oil Ministry has kept in abeyance its order diverting Reliance Industries' KG-D6 gas to Dabhol plant. The ministry had on August 1 ordered RIL to use dwindling KG-D6 gas field output to first meet full demand of Dabhol power plant and supply any remaining output among two dozen other power plants, a decision that drew sharp protests from Andhra Pradesh that faced a 400 MW shortage due to the move.
"...the directions contained (in the August 1 order) may be kept in abeyance," the ministry wrote to RIL late yesterday.
Sources said KG-D6 is currently producing about 28.76 million cubic meters per day as against projected 80 mmcmd output for this time of the year. As per the government order, the output is first used to meet all of the requirement of urea-making fertiliser plants, which drew 15.3 mmcmd of gas.
LPG manufacturing plants got 2.6 mmcmd of gas while the remaining 10.5 mmcmd was prorated among 25 power plants.
But after August 1 order, 7.6 mmcmd of gas out of the quota for power plants was to go to Dabhol plant and the rest - 3 mmcmd, was to be prorated among other consumers.
Following the ministry diktat, RIL last week issued a 15-day notice to power consumers informing of impending cut in supplies from August 21.
This was however strongly protested by Andhra Pradesh Chief Minister Kiran Kumar Reddy.
On Monday he petitioned Prime Minister Manmohan Singh saying that the move would result in gas supplies to power plants in is state dropping from 3.48 million standard cubic metres per day (mmscmd) to 2 mmscmd, resulting in 400 MW of drop in electricity generation.
Sources said the Oil Ministry yesterday issued the order keeping in abeyance its previous order saying the matter would now go to an Empowered Group of Ministers for consideration.
The ministry had in 2010 ordered RIL to sign contracts for more than the projected gas output from KG-D6 fields.
Its July 12, 2010 order to RIL stated that "on days that KG-D6 production is not sufficient to cater to consumers with firm allocation, pro-rata cuts shall be imposed on all firm consumers".
On March 30, 2011, the ministry modified this order to say that in case of fall in KG-D6 output, supplies to city gas distribution projects will first be cut, followed by power projects, LPG plants and fertiliser units in that order.
On August 1 this year, it further modified the order to state that Dabhol power plant enjoys the top most priority at par with fertiliser units and would not be subjected to any supply cuts.
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