Petroleum ministry gives reasons for diverting gas

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The petroleum ministry’s stand that Union petroleum minister S. Jaipal Reddy had no role in deciding matters in respect of gas allocation, was echoed by state panchayati raj minister K. Jana Reddy, a confidant of Mr Jaipal Reddy, in Hyderabad. He said that the state government should not start unnecessary controversies and instead take up the issue with the Prime Minister. Mr Jana Reddy also pointed out that Mr Jaipal Reddy was responsible for supplying CNG to the state.

The Centre on August 1 had decided to divert some more gas from the K6-D6 wells from the state quota to the Ratnagiri power plant. AP was receiving 3.48 mmscmd (million metric standard cubic metres per day) from the gas fields against the committed 6.8 mmscmd. Following the cut, the shortage will grow by a further 2 mmscmd. The Centre’s decision evoked widespread criticism from the Opposition who blamed both Union home minister Sushilkumar Shinde and Mr Jaipal Reddy along with the CM for “neglecting” AP’s interests at a time when the state was going through its severest power crisis. On Saturday the Union petroleum ministry issued a press release detailing the reasons for diverting gas to Dhabol.

Petroleum ministry gives reasons for gas cut
** An EGoM was set up in 2007 to decide on the commercial utilisation and pricing of gas produced under NELP rounds. This EGoM was headed by the then external affairs minister Pranab Mukherjee and Murali Deora, the then petroleum and natural gas minister.

** The EGoM in 2008 laid down a broad gas utilisation policy which gave first preference to fertiliser plants, then to LPG plants, the power sector and finally to the CNG sector (domestic and transport).

** The EGoM on 23.10.2008 stipulated that Ratnagiri Gas and Power Private Limited, Dhabol, would be given the same priority as the fertiliser sector for the purpose of gas allocation and further ordered that it be supplied 8.5 mmscmd from KG-D6.

** There has been a sharp reduction in gas production in the KG-D6 fields. Against the projected level of production of 80 mmscmd, the current level of production is only 29 mmscmd. This has necessitated cuts across users in a reverse order of priority.