OilMin order on KG gas to Dabhol in Maha kept in abeyance

Facing flak for slashing gas supplies to fuel-starved power plants across the country so that requirement of one station in Maharashtra can be met, the Oil Ministry today kept in abeyance its order diverting Reliance Industries' KG-D6 gas to Dabhol plant.

The ministry had on August 1 ordered RIL to use the dwindling KG-D6 gas field output to first meet full demand of Dabhol power plant and supply any remaining output among the 24 other power plants, a decision that drew sharp protests from Andhra Pradesh that faced a 400 MW shortage due to the move.

 "...the directions contained (in the August 1 order) may be kept in abeyance," the ministry late this evening wrote to RIL.

This follows Andhra Pradesh Chief Minister Kiran Kumar Reddy petitioning Prime Minister Manmohan Singh against the move which would result in gas supplies to power plants in his state dropping from 3.48 million standard cubic metres per day(mmscmd) to about 2 mmscmd, thereby resulting in 400 MW of drop in electricity generation.

The matter would now go to Empowered Group of Ministers (EGoM), the order said.

Earlier in the day, Oil Minister S Jaipal Reddy, who hails from Andhra Pradesh, tried to justify the decision saying it was taken by an Empowered Group of Ministers (EGoM) in 2008.But it was oil ministry which had in 2010 forced RIL to sign contracts for more than the projected output from KG-D6 fields saying pro-rata cut on all customers can be applied in case production lags supply commitments.

"There is severe shortage in availability of gas in the case of KG basin. (RIL's) KG basin (field) was to produce 80 million standard cubic metres per day (mmsmcd) in the current year. As against 80 mmsmcd, it is producing only 29 mmscmd," he told reporters here.