NEW DELHI: The government has granted industrial units the freedom to use domestic natural gas in their plant if they can replace it with LNG at another location, in a bid to help fuel-starved units which do not have the infrastructure to ship imported gas from the west coast to their plants.
Several potential customers are located near pipelines that carry natural gas from domestic fields, such as Reliance’s D6 block, but they do not have any gas allocation.
Such customers will be able to take domestic gas allocated to another consumer, whose plant can be supplied imported LNG. The additional cost would be borne by the new customer.
“A policy is framed for self regulation of gas swapping, which must be revenue neutral, and the original allottee of domestic gas would get same quantity of imported gas at no additional cost,” an oil ministry official said.
The ministry has framed the swapping policy due to acute shortage of domestic gas mainly because of the sharp drop in output from Reliance Industries-operated D6 block, the official said.
“Domestic gas allocations of various consumers have been either stopped or significantly reduced. Some of them are willing to pay for LNG. But can’t access it because gas in a pipeline flows only in one direction. The policy will facilitate such consumers,” the official said. Domestic gas is 3-4 times cheaper than the imported gas, which cost around $16-17 per unit in spot purchase.
The policy directs gas suppliers, consumers and transporters to co-operate in arriving at a cost-effective swap arrangement.
“No gas transporter can deny swapping of gas, if the swapping is technically feasible,” the official said.