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RIL forced to import costly gas despite own output

RIL has expressed its reservations over not being allocated a single cubic metre of gas it produces from its D6 block in the Krishna Godavari basin.

business Updated: Apr 30, 2009 20:36 IST
Anupama Airy

Reliance Industries Limited (RIL) has expressed its reservations over not being allocated a single cubic metre of gas it produces from its D6 block in the Krishna Godavari basin.

Senior government officials disclosed that at recent meetings with the petroleum secretary, R S Pandey as also senior power ministry officials, senior level representatives from Reliance have shared concerns over the fact that despite being the largest producer of gas in the country, it is being forced to use imported gas at a price much higher than the gas from its D6 block.

While Reliance is selling its KG D6 gas to core sector industries at the government decided price of cost of $4.2 per
million metric British Thermal Unit (mmBTU), it is buying R-LNG for its own captive use at $6-7 per mmbtu.

“We are not averse to giving gas to any particular company. But if other companies can be given our gas to run their power plants, why should Reliance buy fuel at a higher price for running its 1000 mw plus captive power plant at Jamnagar and the 400 mw at Hazira be kept out,” a senior Reliance official told Hindustan Times.

Sources said the government has already started consultations for allocation of gas to be produced from the second phase of production from Reliance’s D6 block.