The Hindu Business Line : Ministry wants Govt share from RIL for Ratnagiri Gas

New Delhi, July 31 The Power Ministry has asked the Petroleum Ministry to exercise its option of taking Government share of gas from Reliance Industries Ltd’s (RIL) D6 block off the east coast in kind and allocate it to Ratnagiri Gas and Power Pvt Ltd at an affordable price.

Official sources said that since long-term gas linkages for Ratnagiri Gas are yet to be firmed up in spite of efforts made by GAIL (India) Ltd, the Power Ministry has proposed for allocation of 2.1 million tonnes per annum (mtpa) of gas. Ratnagiri Gas is the owner of the erstwhile Dabhol power plant in Maharashtra, which requires 2.1 mtpa or nine million standard cubic metres per day (mscmd) of gas to fire the 2,184-MW plant.

According to a senior GAIL official, “liquefied natural gas (LNG) market has hardened and any options available including domestic availability of gas should be examined.”

The Power Ministry has said that sustained viability of Ratnagiri Gas depends on securing the required fuel at an affordable price on a long-term basis.

Production sharing contract

The production sharing contract between RIL and the Government for the Krishna Godavari block has a provision for the Government to opt either for the profit gas in cash or kind. However, indications are that the Government’s share from KG D6 during the first few years would range between 0.4 mscmd and 4 mscmd.

Further, the Power Ministry has also expressed concern over the pricing formula submitted by RIL for necessary approval stating that it is not in public interest and require further serious deliberations.

GAIL and state-run power producer NTPC Ltd jointly own almost 57 per cent of the Ratnagiri Gas project. GAIL is in talks with Sonatrach of Algeria to buy 2.5-5 mt of LNG annually. The state-owned gas transmission and marketing major is looking at getting it by the end of 2010 or early 2011.

“The breakwater at Dabhol’s LNG terminal would be ready by late 2009 or early 2010. That would allow the power plant to receive LNG directly from a LNG tanker as an alternative to piped gas,” a GAIL official said.

Meanwhile, GAIL has delivered the first-ever gas to Ratnagiri Gas paving the way for the beleaguered unit to switch from expensive naphtha to the cheaper green fuel.

Gas was transported through a 577-km pipeline from Dahej in Gujarat where Petronet LNG is importing 1.25-mt of natural gas in liquefied form from Qatar.

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