Government asks RIL to increase gas supplies to IFFCO, Indo Gulf Fertiliser

The government has asked Reliance Industries Ltd (RIL) to agree to increased supplies of natural gas to urea manufacturing units of Indian Farmers Fertilizer Cooperative Ltd (IFFCO) and Indo Gulf Fertiliser Ltd despite the fast-declining gas production at the KG-D6 gas fields.

IFFCO was, in 2007, allocated 0.52 million standard cubic meters per day of gas from the KG-D6 field for its Phulpur urea plant. But RIL signed gas sales and purchase agreement (GSPA) with IFFCO for only 0.25 mmscmd.

RIL had also signed GSPA with Indo Gulf Fertilizer Ltd for supply of 0.25 mmscmd of gas for its Jagdishpur unit, against the actual allotment of 0.478 mmscmd of gas.

An empowered group of ministers (EGoM) headed by finance minister Pranab Mukhejree had on Saturday decided that RIL should make the full allocation of gas to the fertiliser units.

The ministry of petroleum and natural gas had, as far back as in February, directed RIL to sign GSPAs for the remaining quantities with the two companies - 0.27 mmscmd for Phulpur unit of IFFCO and 0.228 mmscmd for Jagdispur plant of IGFL.

However, RIL's gas production from the KG-D6 fields has almost halved from 61.5 mmscmd in March 2010, to about 31.5 mmscmd over the past two years, forcing a reduction in supplies to consumers.