EGoM to discuss gas allocation policy on 24 Feb: Reddy

Gurgoan: The Empowered Group of Ministers headed by Finance Minister Pranab Mukherjee is likely to meet on 24 February to consider changes in the natural gas allocation policy.

“Its (EGoM) meeting may happen on 24th,” Petroleum Minister S Jaipal Reddy told reporters in Gurgaon.[caption id=“attachment_212906” align=“alignleft” width=“380” caption=“Petroleum Minister S Jaipal Reddy. Image courtesy PIB”]  [/caption]

The EGoM meeting was originally scheduled for today but was postponed.

The EGoM meeting, the first in more than 18 months, would consider changes in gas allocation in view of a sharp drop in output from Reliance Industries’ eastern offshore KG-D6 block.

Officials said the petroleum ministry had proposed to the EGoM to stop gas supplies to power producers that do not sell electricity at regulated tariff and cancel allocation to a few merchant power plants in Andhra Pradesh that currently sell electricity at way above the tariff determined by the sector

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regulator.

Also, it proposes making future gas allocations to only urea fertiliser plants and fuel supply to phosphates and potassium fertiliser producers be stopped.

KG-D6 gas output has fallen to below 39 million cubic meters per day after touching a peak of 60 mmcmd in March 2010, prompting the ministry to suggest changes in the allocation policy.

The official said the requirement of 13.22 mmcmd of gas for urea plant beyond 15.7 mmcmd, which has already been allocated from KG-D6, would be placed before the EGoM.

Similarly, the requirement of 31.81 mmcmd gas for 14 power plants with a total capacity of 7,219.5 MW that are to be commissioned in the 11th Five-Year Plan period ending 31 March would be placed before the ministerial panel. Currently, power plants have been allocated 32.67 mmcmd of

KG-D6 gas.

Also, the admissibility/quantum of marketing margin charged by RIL on sale of KG-D6 and the petroleum ministry’s decision to ask the Petroleum & Natural Gas Regulatory Board (PNGRB) to regulate the marketing margins would be placed before the EGoM.

The power ministry’s proposal to ask RIL to sign an agreement to supply 2.16 mmcmd of gas to NTPC may also figure in the EGoM meeting whenever it is next scheduled, the official said.

RIL had not signed the pact for supply of 2.74 mmcmd of gas out of the 4.46 mmcmd allocated to five power projects. This issue may also figure in the EGoM meeting whenever it is scheduled next, the official said.

PTI