Policy for allocation of natural gas in a month: Guidelines will reserve 35% of available gas for independent projects; R-Adag units will also be eligible for the fuel

India will soon announce a policy to allocate natural gas to power plants, including the projects of the Reliance-Anil Dhirubhai Ambani Group (R-Adag), according to a top official.

"The gas linkage policy will be ready in a month's time and will decide the allocation of gas for power projects in the country," power secretary P. Umashankar said.

The Central Electricity Authority, the apex power sector planner, started work in December on a policy to allocate natural gas and submitted a draft for the power ministry to approve in February.

Like the coal linkage policy approved last year, it will be based on a system that will award points, with a maximum of 100, on parameters such as status of land acquisition and water linkage, among others.
In keeping with the country's gas utilization policy defined by an empowered group of ministers (eGoM), the new guidelines will reserve 35% of the available gas for new independent power projects. R-Adag projects such as the one being developed by Reliance Power Ltd at Dadri in Uttar Pradesh, too, will be eligible to receive the fuel.

The government allocates natural gas to customers based on a priority list: Existing fertilizer units rank first, followed by existing power, petrochemical and city gas projects.Reliance Power, which has applied to CEA for gas, could not be immediately contacted.CEA will process the allocations once the policy is in place. Projects that together would have an installed capacity of around 90,000MW have applied for gas allocation.
Natural gas was at the centre of a fight between Mukesh Ambani and his brother Anil. Anil Ambani's Reliance Natural Resources Ltd, citing a family agreement between the brothers, had laid claim to gas from Reliance Industries Ltd's (RIL) fields in the Krishna-Godavari basin, off India's east coast to fuel the gas-based power plant at Dadri.Mukesh Ambani's flagship expressed its inability to supply gas to a buyer not listed in the government's gas utilization policy and at a price not set by the state.The matter went to court and the Supreme Court agreed with RIL but asked the two brothers to resolve the issue in keeping with the government's policy on gas utilization and pricing.
The eGoM headed by finance minister Pranab Mukherjee decides upon the allocation and has power minister Sushil Kumar Shinde, home minister P. Chidambaram, law minister Veerappa Moily and petroleum minister Murli Deora as members.