RIL snubs call to cut gas output | business | Hindustan Times
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RIL snubs call to cut gas output

The government has asked Reliance Industries Ltd to cut gas output from its eastern offshore KG-D6 fields so that imported fuel stocks can be cleared, a demand that the Mukesh Ambani-run company has rejected.

business Updated: May 04, 2010 21:31 IST

The government has asked Reliance Industries Ltd to cut gas output from its eastern offshore KG-D6 fields so that imported fuel stocks can be cleared, a demand that the Mukesh Ambani-run company has rejected.

Petroleum Ministry had in a meeting on April 30 asked RIL to explore cutting down output so that the imported liquefied natural gas (LNG) accumulating at Petronet LNG Ltd’s Dahej terminal in Gujarat can be sold.

“Reliance may examine whether it would be possible to cutback the production from KG-D6 fields by some amount for a short period,” according to the minutes of the meeting.

“Reliance has not agreed to or planned to cut down on the production of gas from KG basin,” a company spokesperson said. Petronet, which ships LNG from Qatar on a long-term contract, is facing a glut after three fertiliser plants that used gas as feedstock shut down for maintenance and a power plant owned by NTPC tripped. Also, NTPC’s Dadri plant is to undergo a shutdown from Wednesday.

The schedule for outgo of gas from Petronet’s Dahej import terminal in Gujarat was less than the inflow, creating a backlog of 75 million cubic meters or 96 per cent of inventory limit, according to the minutes.

The problem has been complicated by Petronet’s decision to lease out Dahej terminal to Gujarat State Petroleum Corp for import of 9 cargos or shiploads of LNG even though state-run GAIL India did not have the pipeline capacity to evacuate gas beyond the domestic production and already contracted long-term LNG.

By asking RIL to cut output, the ministry had hoped to sell imported gas using KG-D6 gas.