Dabhol plant to get priority, Govt directs RIL

The Reliance Industries Limited (RIL) has been asked to provide the produced natural gas from its Krishna Godavari (KG) D6 basin to Ratnagiri Power Project Limited (RGPPL) and Fertilizer units on equal priority, official sources said.

RGPPL, previously known as Dabhol power plant, has been established by now bankrupt US Power firm ‘Enron’, which is now under Indian government project and at careworn stage.

To nourish the Dabhol plant, government has decided to give it priority over other power plant projects in the country, while Ministry of Petroleum and Natural Gas (MOP&NG) has directed the RIL to give second priority to the power plants of Andhra Pradesh from the assigned supply of 18 million metric standard cubic meter per day (mmscmd) for the power plants.

The MOP&NG in a released statement has said that RIL would supply 1.4 mmscmd gas during January to March 2009, 2.7 mmscmd during April to September 2009 and 8.5 mmscmd after September 2009 depending upon the commencement of production from its KG D6 field.

The gas from RIL’s KG D6 basin is expected to produce from March 2009 and would be distributed according to MOP&NG’s direction which would be decided by MOP&NG after consulting other Ministries, stakeholders and as per Court orders.

For selling natural gas to all customers produced from RIL’s KG D6 field, an Empowered Group of Ministers (EGoM) on September 12, 2007 in a meeting had prepared a workable Gas Sale Purchase Agreement (GSPA). According to it, ‘the entire natural gas produced from KG D6 basin would be sold to all customers at USD 4.2 per million British thermal units (mbtu) excluding transportation cost, taxes, etc.’

It had also been decided in the meeting that the supplying of gas to priority sectors would be applicable only on first 40 mmscmd of produced gas from KG D-6 field; remaining 40 mmscmd would be distributed to non-prior sectors excluding sponge iron/steel plants. The plants of steel and sponge iron would get the gas supply on priority basis but from unreserved quota.

On the other hand, RIL Chairman Mukesh Ambani and his sibling Anil Dhirubhai Ambani, the Chairman of Anil Dhirubhai Ambani Group (ADAG) (under which Reliance Natural Resources Limited and Reliance Power Limited exists) have been fighting in the court over the sale price, while NTPC is also fighting the similar case in the court and the final result is yet to come.