Fertiliser units to get top priority for RIL's KG gas

23 March 2009

The five-member empowered group of ministers headed by all-purpose minster Pranab Mukherjee met today to decide on allocation of natural gas from Reliance Industries Ltd's eastern offshore KG-D6 fields in the Krishna-Godavari basin to power plants.

Distribution among fertiliser plants has already been decided.

Reports say that power plants in Andhra Pradesh and Maharashtra are likely to get preference. ''As production from KG-D6 is expected in a few weeks, it is emergent to take a decision regarding supply of gas so produced to power plants,'' a ministry letter to the Election Commission seeking its approval to hold the meeting said.

With the general election close, the government needs the Election Commission's approval for any policy decision.

Apart from Mukherjee, the GoM comprises power minister Sushilkumar Shinde, chemicals and fertilisers minister Ram Vilas Paswan, law minister HR Bhardwaj and petroleum minister Murli Deora.

Reliance owns 90 per cent of the gas-rich KG-D6 block. The company will start producing 10 million standard cubic metres per day (mscmd) and intends to ramp it up to a peak of 80 mscmd by the end of 2009. The government has outlined a utilisation policy for this gas, listing the gas recipients in order of priority as existing fertiliser, liquefied natural gas plants, petrochemical and power plants, and city cooking gas distribution projects and refineries.