In bad news for gas based projects, the Ministry of Petroleum and Natural Gas (MoPNG) has threatened to allocate the unutilized share of gas earmarked from the KG-D6 for the power sector to other fuel-starved gas-fired industries. The ministry has taken umbrage at the fact that the combined cycle power plants of the country have failed to fully consume their respective shares, which was made available to them on a priority basis, even in view of the inadequate supply situation facing the nation. The gas-fired power stations have drawn, on an average, 25 million metric standard cubic meters (MMSCM) of gas daily, during the month of March 2010, against the allocation of 31 MMSCM from the gas fields operated by Reliance Industries.
However, the power utilities are not entirely to blame in this case. Lower scheduling by the state governments, prevailing high frequency conditions in the Southern Grid during nights, planned shut down, augmented Administered Pricing Mechanism (APM) gas supplies over the last 2-3 months and lack of flexibility in contractual terms and conditions offered by Reliance for gas sales are also at fault. Notably, as per a recent report from the Central Electricity Authority (CEA), the country’s gas-based generation capacity stands at 17,055.85 MW, which is around 10.7% of the total installed capacity of 1, 59,398.49 MW, as of March 31, 2010.
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