Mukesh Ambani managed Reliance Industries Ltd (RIL) has asked the government to immediately name new customers for its natural gas, saying it is being forced to produce below capacity in the absence of mandated buyers.
In its September 8 letter to the petroleum ministry, RIL said its eastern offshore KG-D6 fields can produce gas of more than 60 million metric standard cubic meters per day (mmscmd) but the firm is being forced to keep output below 40 mmscmd as the government has not yet released allocation to new customers.
“There being an immediate demand from the existing customers in various sectors to consume more than 80 mmscmd gas, we once again request you to make additional allocations which will enable us to increase the production of gas from KG-D6 to 80 mmscmd,” the letter said.
The company asked the government to convert all allocations for the power sector customers, currently valid till September 30, 2009, to that of five years. The contracting priority released by the government for the power sector customers was valid till September 30, 2009. “In view of increased gas availability potential, we request that all the allocations be extended till the validity of the contract, i.e. five years, at 90 per cent plant capacity,” it said.
The government has allocated 15.1 mmscmd of KG-D6 gas to fertiliser units, 3 mmscmd to LPG plants, 18 mmscmd to power firms, 0.83 mmscmd to city gas projects and 3.75 mmscmd to steel plants. Of this firm allocations, customers like NTPC, Dabhol and Essar Power are yet to draw 6.95 mmscmd gas.