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Power producers ask for non-core sectors gas reallocation from Oil Ministry

10 Jan 2012 Evaluate

In order to get the natural gas, currently supplied to non-core users like refineries and steel plants, re-allocated to core sectors, the Association of Power Producers (APP) have requested the Ministry of Petroleum & Natural Gas to consider discontinuing gas to non-core sectors and utilize the same for core sectors like power and fertilizer. Private power producers informed that over 18 million standard cubic metres per day (mmscmd) of natural gas is presently being supplied to non-priority sectors.

The private electricity generators are awaiting gas allocation by the Empowered Group of Ministers (EGOM) as gas-based power projects with a generation capacity of about 4,000 MW are ready to commence power generation before March 31, 2012. The association also underscored the fact that public money in the form of debt provided by various Indian banks and financial institutions is at a grave risk unless these projects start commercial operation by March 31, 2012. Private power producers’ association is also of the belief that around 80 mmscmd of gas can be released for allocating to upcoming projects provided the capacity utilization of all power plants is rationalized at around 60 percent.

At a time when India’s power industry is going through a challenging period and availability of gas is also becoming scant due to the sharp and constant reduction in gas throughout from refining major Reliance Industries, there is urgent need of government interventions and swift decision making in order to avoid idling of capacity. With the country’s overall gas based power capacity amounting to 16,600 MW, the total consumption of gas by these plants currently stands at 66 mmscmd with an average capacity utilization of around 70 percent.

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