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Govt decides to give surplus gas supplies to power plants until March 2016

26 Aug 2013 Evaluate

Giving some respite to gas-starved power sector, the Empowered Group of Ministers (EGoM) headed by defence minister AK Antony decided that any surplus natural gas left after meeting the needs of urea plants would be supplied to fuel-starved electricity generating stations. Additional gas above 31 million standard cubic metres per day received by the fertiliser sector will be given to power projects until March 2016,

The government's move will benefit projects with a combined capacity of over 7,800 MW. The power sector would get around 12-14 mmscmd of gas in the next three years. Till now, gas-based fertiliser plants remained the government’s topmost priority in the allocation of gas, followed by LPG-extraction units, power projects, city gas, steel and refineries.

After a drop in output at Reliance Industries' KG-D6 block led to reduced domestic supplies, the power ministry had sought parity for electricity utilities with fertiliser units in the allocation of gas. Earlier, in March, electricity-generating stations stopped getting gas from KG-D6 block.

The EGoM also cleared new bidding norms for setting up ultra mega power projects (UMPPs) having capacity to produce 4,000 mw or more of electricity. As per the new norms, the ownership of UMPPs will remain with distribution companies, while qualified bidders will be contractors, and developers will be barred from importing equipment for the projects.

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