Give us more customers, RIL tells government
10 Sep 2009
Mukesh Ambani's Reliance Industries Ltd has reportedly asked the government to immediately name more customers for natural gas from its Krishna-Godavari block, saying it is being forced to produce less than capacity for lack of government-mandated buyers.
RIL's eastern offshore KG-D6 fields can produce more than 60 million standard cubic metres per day of gas, but the firm is being forced to keep output below 40 mmscmd as the government has not yet granted allocation to new customers.
"There being an immediate demand from the existing customers in various sectors for more than 80 mmscmd gas, we once again request you to make additional allocations which will enable us to increase the production of gas from KG-D6 to 80 mmscmd," R P Sharma, director and head of RIL's petroleum and natural gas business, wrote to the petroleum ministry on Tuesday.
The government has allocated 15.1 mmscmd of KG-D6 gas to fertiliser units, 3 mmscmd to liquefied petroleum gas plants, 18 mmscmd to power firms, 0.83 mmscmd to city gas projects, and 3.75 mmscmd to steel plants. But customers like the National Thermal Power Corporation, the Dabhol power plant in Maharashtra, and Essar Power are yet to draw their allotted quota.
Because of this, RIL said, 11 mmscmd of gas was being sold to the power plants on a fallback or temporary basis. It demanded that this be converted to firm allocations. "This will enable us to maintain a stable production of gas, and will also benefit customers because the KG-D6 gas is the cheapest gas available in India today," it said.
RIL said several captive power plants could consume 8-10 mmscmd of gas. "Since captive power plants have already been identified as one of the priority sectors, we request you to allow us to supply gas to these captive power plants," Sharma's letter said.
