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Southern States to benefit from RIL’s gas allocation

NEW DELHI: The allocation of 18 million standard cubic metres of gas from the Reliance Industries’ (RIL) KG Basin field for the power sector will come as a major boost to the efforts of the Government to enhance power production and would help many power-starved States and plants deal with the crisis more effectively during the summer season.

According to Power Ministry estimates, power plants having 14000 MW generation capacity had been producing only 7000 MW till now as they could not operate at their optimum capacity due to shortage of natural gas fuel. However, the major chunk of allocation of natural gas from the KG Basin will help them step up power generation and it is estimated that around 5000 MW of additional power would be available for distribution especially among Southern States during summer months.

The big beneficiaries would be the power plants in Andhra Pradesh which will be supplied 2.7 million standard cubic metres that include GMR’s Vemagiri, GVK’s Jegurupadu and Lanco’s Kondapalli unit. While other projects in Gujarat such as Essar, Gujarat Puguthan and Gujarat Industries Power will get 2.4 million standard cubic metres.

Official sources said RIL was expected to charge a marketing margin of 13.5-14 cents per mBtu over a base price of $4.2 and may agree to get paid in rupee terms as it did for fertilizer firms.

Not only this, important power projects like the upcoming Bawana power plant and additional power capacity expansion at Pragati Power plant in Delhi would get a boost ahead of the 2010 Commonwealth Games.

The beleaguered Dabhol power plant in Maharashtra is also likely to benefit from the latest decision of the Empowered Group of Ministers headed by External Affairs Minister Pranab Mukherjee. Around 4.5 to 5 million standard cubic metres of gas will be supplied to the power plants of NTPC.

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