R-Power applies to Power Ministry for gas allocation - Govt inviting fresh applications this month for power plants to get special recommendation

Anil Ambani owned Reliance Power's projects are getting a fresh lease of life and this time from the Ministry of Power . The government is inviting fresh applications this month for power plants which will get special recommendation by the Power Ministry for gas allocation in the 12th Five Year Plan. Reliance Powerhas applied for gas allocation for two of its biggest power projects in Dadri and Jambusar. 

“We have already got applications for 120 power projects. After processing the applications, the Power Ministry will recommend these power plants for gas allocation to the Ministry of Petroleum and Natural Gas,” a top Central Electricity Authority (CEA) official told ET Now asking not to be quoted. 

The criteria for selection of the power projects will be based on the following - 30 per cent weightage to land availability, 20 per cent to projects located in states facing acute coal shortage, 20 per cent to projects using sea water instead of fresh water, 20 per cent to efficiency of the plant and 10 per cent to environmental clearance. 

According to CEA documents, Reliance Power’s Dadri plant of 7480 MW capacity already has land available. The company’s 7200 MW Jambusar plant has already been allotted 1900 acres land and transfer of land is in progress. The Jambusar plant will also use sea water for its operation. The two plants have massive gas requirement. Dadri has requested 35.90 mmscmd and Jambusar 34.56 mmscmd of gas. 

Reliance Power stock soared 8.89 per cent to Rs 188.69 on the Bombay Stock Exchange on Thursday. If Reliance Power is selected by Power Ministry for recommendation to the Petroleum ministry then it will get a priority in gas allocation. 

This could be a huge advantage for Reliance Power which needs gas to begin raising funds for its Dadri plant which had been stuck due to litigation. Anil Dhirubhai Ambani group’s (ADAG) Reliance Natural Resources had been fighting a legal battle with brother Mukesh Ambani’s Reliance Industries for gas allocation. 

The Supreme Court delivered its verdict in this landmark case on May 7 this year after which the two companies signed a Gas Sale Master Agreement on 25 June 2010. RIL announcement had said “The agreement will be subject to government’s gas utilization policy and Empowered Group of Ministers (EGOM) decision.” 

EGOM is currently discussing gas allocation for power projects until 2012 which includes ADAG’s 2,400 MW Samalkot expansion project in Andhra Pradesh. Simultaneously, Power Ministry is also preparing a policy for gas allocation to power projects in the 12th Plan. 

Other companies which have also applied for getting Power Ministry’s recommendations include NTPC, Tata Power, JSW Energy , GMR Infra and Lanco Infratech. The application deadline is November 20.