Reliance KG gas allocation to be decided on July 12

06 July 2007

Mumbai: The Bombay High Court will give the final order on the allocation of Reliance Industries''s (RIL) gas from the D6 block in the Krishna-Godavari basin on 12 July.

RIL is expected to start gas production from the block in June 2008 with around 26 million cubic metres a day (mcmd), and hike it up to a peak rate of 80 mcmd by mid-2009.

The 80 mcmd of gas from the block would be enough to meet the country''s current demand of around 170 mcmd. Currently only half of the demand is met.

The High Court, in its interim order on June 20, had restricted RIL from selling its gas from the D6 block to any buyer other than Reliance Natural Resources (RNRL) and NTPC for eight years.

Of the 80 mcmd production, 12 mcmd is tied-up with NTPC for the company''s Kawas-Gandhar power plant, while 28 mcmd is contracted with Reliance Natural Resources (RNRL) for Reliance Energy''s (REL) power plant at Dadri in Uttar Pradesh.

RIL wants to be allowed to sell gas to a third party while RNRL lawyers said the gas was meant solely for REL''s 7,000 MW Dadri power project. Typically, constructing a power plant takes around three years, while production of the gas from the K-G basin is expected to begin in a year.