The government has ordered RIL to sign agreements with NTPC and 10 city gas distribution firms for supply of gas from KG-D6 fields.
The state-owned power producer NTPC Ltd had requested the Ministry of Petroleum and Natural Gas to facilitate supply of balance gas to its NCR power plants.
In a letter to the ministry, the power major stated that NTPC was ready to receive the entire Empowered Group of Ministers (EGoM) allocated KG-D6 gas of 4.46 mmscmd since beginning. However, initially the contracted quantity could be done up to 2.3 mmscmd, because of constraints in GAIL’s pipeline.
In June 2010, GAIL informed regarding removal of constraints and was ready to transport the entire allocated quantity of 4.46 mmscmd. However, RIL has not signed the side letters to increase the daily contract quantity from 2.3 mmscmd to 4.46 mmscmd.
NTPC has taken up the matter with the ministries of power and petroleum and natural gas and Reliance Industries Ltd on several occasions but no progress has been made so far. RIL was also directed by the EGoM, at its meeting held on February 24, 2012, to sign the agreements for the balance allocated quantity of 2.16 mmscmd for NTPC’s NCR stations but the matter is still pending. Overall, the EGoM meeting remained inconclusive. The EGoM had left it to the discretion of the petroleum ministry to decide on the proposed curb on gas supplies to power producers who are selling electricity at unregulated tariff. It also took note of the continued dip in the output from the KG-D6 block of RIL.
In January this year, the Ministry of Power directed Reliance Industries to supply natural gas from its KG-D6 fields to NTPC’s Kawas and Gandhar expansion projects without waiting for a court decision on the gas supply dispute between the companies (the matter is pending in the Bombay High Court).
NTPC in its letter stated that non-supply of allocated KG D6 gas to its NCR stations had put the beneficiary states under the huge burden of R-LNG and the stations were losing generation in a power deficit scenario because of non-scheduling of costly R-LNG based power.
The power ministry has also supported the utility’s demand. According to reports by the ministry, NTPC NCR stations incurred generation loss of 11,525 million units in the period from June 2010 to November 2011.
RIL has not signed pacts for supply of 2.74 mmscmd out of the 4.46 mmscmd of gas allocated to five power projects by the EGoM. Of these, state-owned NTPC is the most-affected, with 2.16 mmscmd of gas supply pending.