IOC seeks 23 mscmd of gas from RIL's D6 block

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Indian Oil Corporation has sought around 23 mscmd of gas from Reliance Industries (RIL) operated Krishna-Godavari Basin D6 block.

The IOC Director (Planning and Business Development), BM Bansal, told Business Line that "the Petroleum Ministry had asked all the refineries to submit their gas requirements. Our requirement in next three years is expected to be around 23 mscmd, which we have communicated to the Ministry."

The refineries require gas for operational purposes. Earlier, refineries were using diesel, furnace oil, and naphtha, for operation purposes but now they are shifting to gas which is a cleaner fuel.

Elaborating Bansal said, "We can take the said quantum once all our refineries are connected to pipeline network. At present, we can take gas at our Mathura and Gujarat refineries."

While the Panipat refinery will be connected in next three-four months, infrastructure is not ready for Haldia, Barauni, and Guwahati refineries.

Currently, IOC sources gas from GAIL (India) and re-gasified liquefied natural gas (R-LNG) from Petronet LNG . Currently, IOC can use gas only at its two refineries - Mathura and Gujarat. It uses 2 mscmd of gas, but once all the refineries are connected the requirement is expected to go up significantly, sources said.

RIL is producing around 45 mscmd of gas from its prolific D6 block. After allocating gas according to the Gas Utilisation Policy from the initial output of 40 mscmd from the block to the priority sectors (power, fertiliser, steel, city gas distribution, and gas-based LPG plants), an Empowered Group of Ministers in October allocated additional 50 mscmd gas (20 mscmd is on firm basis and 30 on fallback).

Additional allocation will enable RIL to ramp up its production. The fall-back allocation refers to the quantum which the operator would be able to produce over and above its sustained output level. RIL is expected to reach 60 mscmd by December. Of the 20 mscmd gas allocated on firm basis, two-third of produce has been given to power plants. Apart from them petrochemical plant (RIL's plant has got 1.918 mscmd) as well as some refineries will get the gas.

Subsequent to the additional allocation, power units will get 13 mscmd on firm basis and 12 mscmd on fallback basis. Refineries will get about 5 mscmd of gas on firm basis and an additional 6 mscmd on fallback basis. The distribution to refineries will be on a pro rata basis.

Non-urea subsidised fertiliser plants will get 0.178 mscmd of gas and 0.44 mscmd will go to steel plants. The Ministerial panel has allocated 2 mscmd on fall-back basis to city gas distribution projects, and 10 mscmd to captive power plants.

Taken from Business Line