ADAG's proposed power plants face `just-in-time' gas allocation

The government is willing to consider earmarking gas for firing up Anil Ambani's future power plants, such as the one planned at Dadri in UP, around six months before they are ready to be switched on, a top oil ministry functionary told  indicating that fuel shortage will not be a constraint once he gets his projects off the ground.

Sources said key government functionaries, who have a pivotal role in deciding matters conerning gas, conveyed this to Anil when he met them in the Capital recently. ‘‘Anil has been told that the government can give gas six months and not three years before his plants come up. He was also urged to get moving with the proposed projects,'' a source privy to the discussions said on condition of anonymity. A company spokesperson declined to comment.

The statement is in line with existing policy that does not allow reserving fuel for projects where work is yet to begin. About 12,000 mw gasfired capacity is in various stages of construction and the government will allocate fuel as each one gets ready. Anil's future plants will be considered for gas from the Krishna-Godavari field, operated by elder brother Mukesh Ambani's Reliance Industries Ltd, if production tops the quantity that has been already earmarked. But Anil will not have any problem in securing supplies as more gas will come from ONGC and Gujarat State Petroleum Corporation's fields in the region around the time the plants may come up.

Oil ministry officials stressed there is no dispute and no discrimination as allocation policy is clear. They rationalised that Anil's Dadri plant will take at least 2-3 years to build. Any expansion of his Samalkot plant in Andhra Pradesh too may not happen before the second half of 2012.

The government may allocate natural gas to the Anil Dhirubhai Ambani Group's pro- posed power plants, such as its Dadri project, only six months prior to commissioning, as reservation of gas is not allowed under the present policy.

“The gas utilisation policy is very clear. Gas, which is a precious asset, cannot be reserved for anyone,“ a top government official said. “So, for anyone wanting natural gas for their plants, be it in fertiliser, power or any other sector, the allocation is to be made closer to the time when they can actually consume that gas,“ he said.In a similar vein, Reliance Industries' Chairman Mukesh Ambani last week told company shareholders that his firm will supply gas to ADAG plants as and when they are ready and it was subject to the allocation being made by the government.

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