Jaipal stands by decision on gas allocation but Kiran hopeful

Published: 07th August 2012 09:28 AM  |   Last Updated: 07th August 2012 09:28 AM   |  A+A-

Even as chief minister N Kiran Kumar Reddy led a delegation to Delhi seeking reversal of additional allocation of gas to Maharashtra’s Ratnagiri Power Plant, which led to a cut in supply of 2 mmscmd (million metric standard cubic metre per day) gas to the state, Union petroleum minister S Jaipal Reddy on Monday said there was nothing wrong in the decision since it was a government plant and the Centre gets priority when a decision has to be made between a government plant and private plants.

“I cannot go on defending private power plants. What answer will I give if anyone questions me why I was according priority to power plants in the private sector while neglecting the government plant in Ratnagiri,” he asked. He also said: “For eleven months, I had ensured supply of gas to the state, helping it save thousands of crores of rupees. Now, while honouring the commitment of gas to Ratnagiri, there is a cut in supply to the state because gas production has come down. The allocation was made in 2009 by the Empowered Group of Ministers (EGoM). You should appreciate that for 11 months, I had supplied gas to the state rather than criticising me now.”

Meanwhile, at Delhi, after meeting the Prime Minister, Kiran Kumar hoped that a positive decision would come out in a day or two.

“We have explained to the Prime Minister the injustice done to our state. He said he would call a meeting of the EGoM and discuss the issue,” the chief minister said.

He added: “If the EGoM had taken the decision of allocating gas to Ratnagiri in 2008, the same EGoM, in 2009, had allocated 9.16 mmscmd to the state, from which 2 mmscmd is cut now. Why should one refer to the 2008 decision and not to the 2009 decision when both were taken by the EGoM only,” the chief minister argued. “I along with 28 MPs requested the Prime Minister to restore the 2 mmscmd gas to the state,” he said.

But in Hyderabad, Jaipal Reddy said the next option before the state government was to buy the more expensive regasified liquefied natural gas (RLNG) for its power plants. “The decision on allocation of gas to Ratnagiri cannot be reversed now. Either the Union Cabinet or EGoM has to take a decision and it would take a very long time,” he said. Jaipal Reddy added that the availability of RLNG too was limited and if the state desired, he would help it in case the crisis deepens in future.

The cut in natural gas allocation to the state, though on August 1, is yet to take effect. It may take another four or five days for the  implementation and before the state starts to feel the pinch. If the allocation is restored, the state will get 3.48 mmscmd. Otherwise, it will have to make do with 1.4 mmscmd gas.

Meanwhile, official sources said that the allocation to Ratnagiri cannot be construed as diversion from Andhra Pradesh’s quota since allocations to states change in accordance with availability. Fertiliser plants get top priority, followed by LPG and power plants.

The Ratnagiri plant, though it is a power plant, was accorded fertiliser plant status in 2008, expecting that the gas available in D-6 well of Reliance would be of the volume of 40 mmscmd. But gas production went down subsequently. Interestingly, the Ratnagiri plant is receiving 0.9 mmscmd of gas from ONGC and 7.6 mmscmd from D-6 in Andhra Pradesh.

The production at D-6 in the K-G basin, which was 32 mmscmd in March this year, has gradually declined to 29 mmscmd now. The production has been coming down by one mmscmd every month, official sources said.

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