The empowered group of ministers on gas allocation will soon draw up a list of the next set of beneficiaries in the power sector to receive gas from Reliance Industries’ (RIL) KG basin. A senior government official told that as opposed to the earlier policy of giving KG basin gas to only old projects that did not get enough gas, this time priority will be given to projects with fresh capacities and new ones that are in advanced stages of execution.
The biggest beneficiaries of the new decision will be NTPC, the state-run market leader in power generation — it has lined up 7,500 mw of expansion projects — and ADAG’s proposed gas-based power plant at Dadri. The Dadri project will, however, be eligible for the fuel only after the gas sale agreement with RIL is approved by the government in accordance with the Supreme Court verdict.The decision will be based on a new gas linkage policy being finalised by the power ministry that will rate projects for fuel allocation on an order of priority and based on their level of preparedness, regulatory clearances and ability to execute projects on time, the official said requesting anonymity.
Once approved, the fresh allocation of gas would come as a boon for about 7,000 mw of projects proposed for the Eleventh Plan and another 20,000 mw proposed for the early part of the Twelfth Plan. “The details of linkage policy are being finalised after which we will put up the cases of companies fit for getting fuel allocation before the empowered EGoM,” said an official in the power ministry asking not to be identified.
In its last meeting, the EGoM has approved gas allocation only for existing and stranded gas-based power projects in the country. The new linkage system for gas would be similar to the one existing for the coal sector with first preference given to central and state projects and their expansion plans. Next in order will be other expansion power projects and where tariff approval has been taken followed by projects bid on tariff and captive projects.
Under the linkage system, preference would also be accorded to projects in advanced stage of getting various clearances and where the annual turnover is above a stipulated level and internal resource generation is healthy. Gas allocation would not be for full capacity and companies would have to make alternate arrangements for a portion of their need.
“There would also be a system bank guarantee, and companies failing to meet the milestones would not only lose this guarantee but their linkage would also be cancelled,” said the power ministry official.
The new linkage policy’s expected preference for central and state projects could see NTPC’s expansion projects of 1,000 mw each at Badarpur, Auraiya, Faridabad and Dadri getting some allocation of the KG gas. Besides, NTPC has sought gas for the 2,000 mw expansion project of Ratnagiri Gas and Power Pvt Ltd (RGPPL).
Besides, gas for new projects could also benefit APGenco’s 2,100 mw Karimnagar project, Haryana government’s 1,500 mw Faridabad project, Mahagenco’s 1,040 mw Uran expansion project. A few private sector projects in Maharashtra, Gujarat and Andhra Pradesh would also benefit.
RIL’s KG D-6 block is currently providing about 52 mmscmd of gas to customers in fertiliser, power and petrochemicals on a firm basis and another about 10 mmscmd gas on a fallback basis. The total approved production of the block is 80 mmscmd while different estimates suggest that the production could be scaled up to about 120 mmscmd.
Once approved, the fresh allocation of gas would come as a boon for about 7,000 mw of projects proposed for the Eleventh Plan and another 20,000 mw proposed for the early part of the Twelfth Plan. “The details of linkage policy are being finalised after which we will put up the cases of companies fit for getting fuel allocation before the empowered EGoM,” said an official in the power ministry asking not to be identified.
In its last meeting, the EGoM has approved gas allocation only for existing and stranded gas-based power projects in the country. The new linkage system for gas would be similar to the one existing for the coal sector with first preference given to central and state projects and their expansion plans. Next in order will be other expansion power projects and where tariff approval has been taken followed by projects bid on tariff and captive projects.
Under the linkage system, preference would also be accorded to projects in advanced stage of getting various clearances and where the annual turnover is above a stipulated level and internal resource generation is healthy. Gas allocation would not be for full capacity and companies would have to make alternate arrangements for a portion of their need.
“There would also be a system bank guarantee, and companies failing to meet the milestones would not only lose this guarantee but their linkage would also be cancelled,” said the power ministry official.
The new linkage policy’s expected preference for central and state projects could see NTPC’s expansion projects of 1,000 mw each at Badarpur, Auraiya, Faridabad and Dadri getting some allocation of the KG gas. Besides, NTPC has sought gas for the 2,000 mw expansion project of Ratnagiri Gas and Power Pvt Ltd (RGPPL).Besides, gas for new projects could also benefit APGenco’s 2,100 mw Karimnagar project, Haryana government’s 1,500 mw Faridabad project, Mahagenco’s 1,040 mw Uran expansion project. A few private sector projects in Maharashtra, Gujarat and Andhra Pradesh would also benefit.
RIL’s KG D-6 block is currently providing about 52 mmscmd of gas to customers in fertiliser, power and petrochemicals on a firm basis and another about 10 mmscmd gas on a fallback basis. The total approved production of the block is 80 mmscmd while different estimates suggest that the production could be scaled up to about 120 mmscmd.
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