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Gas use policy relaxed

New Delhi, Jan. 3: The government has allowed power plants to divert natural gas from one unit to another for a period of one year.

The move follows a sharp drop in gas output from the KG basin resulting in several units operating below capacity.

Officials said, “The company will now be allowed to club the entire allocated gas and use it in one or more plants to improve the plant load factor (PLF).”

“Many power plants are operating at low plant load factor because of acute shortage in the availability of domestic gas leading to inefficient production of electricity… the ministry has notified guidelines for clubbing/diversion of allocated gas between two or more power plants of the same entity (the ownership structure of the power plants involved in clubbing/diversion must be identical) to improve the PLF and corresponding increase in the total generation of electricity,” the oil ministry said.

According to the Central Electricity Authority, the total gas-based capacity in the country is about 18,903MW. Gas available to the power sector is only 55 million metric standard cubic metres per day (mmscmd), which can cater to the generation of about 10,000MW.

Gas supply can be shuffled only between plants that had originally been allocated gas, but not to a new plant built by the company, officials said.

Also, the company would also have to take approval of the power distribution company.

The petroleum ministry has said the clubbing or diversion should not be for a period of more than a year.

Higher power output

This should lead to higher production of electricity compared with the pre-clubbing arrangement. The cost of the gas, so diverted, would be in accordance with the price based on the source of the diverted gas so that there is no financial burden on the end consumers, the statement said.

The entity seeking clubbing/diversion would have to bear any additional financial liability arising from existing and future gas sale and transport agreements, it said, adding that the end-use of the diverted gas will remain the same — supply of power to state discoms.

“The power plants will, therefore, have to obtain no-objection from the power distribution company concerned to which they are supplying electricity (pre-clubbing/diversion) and the ministry of power shall operationalise the arrangement,” the ministry added.

Gas output from Reliance’s KG-D6 fields stood at just 22.7mmscmd against projections of 86.73mmscmd.

Fertiliser units get priority for the gas followed by power. Of the current production from the KG fields, fertiliser gets 14.84mmscmd and power, 5.03mmscmd. The remaining 2.9mmscmd is for others such as LPG users.

 
 
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