The Union Government on Tuesday re-constituted the Empowered Group of Ministers (EGoM) headed by Finance Minister Pranab Mukherjee to work out further allocation of natural gas from Reliance Industries Limited (RIL) KG Basin D6 block gas field to new users.

Union Petroleum and Natural Gas Minister Murli Deora told journalists here that an Empowered Group of Ministers (EGoM) had been constituted.

Mr. Deora had written to the Prime Minister’s Office (PMO) in August seeking constitution of a new EGoM.

At present, RIL is restricting output at about 40 million standard cubic metres per day (mscmd) of gas from its Eastern offshore KG-D6 fields despite having capacity to produce 65 mscmd, as it waits for the government to name new buyers beyond the initial volumes. Besides Mr. Mukherjee and Mr. Deora, the EGoM would include Power Minister Sushil Kumar Shinde, Fertilizer and Chemicals Minister M. K. Alagiri, Law and Justice Minister Veerappa Moily and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

Pricing of gas

RIL is fighting a lawsuit with Anil Ambani Group firm Reliance Natural Resources Ltd over supply and pricing of gas from the KG-D6 fields. The previous EGoM had decided on allocation of first 40 mscmd of gas from RIL’s KG-D6 fields. Now there is a need to revive the mechanism so that we can allocate gas beyond these levels to new customers. The previous EGoM, which ceased to exit with the installation of a new Government in May this year, had allocated the first 40 mscmd of gas from KG-D6 to fertilizer units, power plants, city gas projects, LPG plants and steel sector.

Restricting output

RIL, however, now has capability to produce close to 65 mscmd, but is restricting output at 40-41 mscmd because of lack of government-identified customers.

RIL has so far contracted gas supplies to 15 fertilizer firms, 19 power plants and three steel makers.

It has also signed a gas sales and purchase agreement (GPSA) with GAIL for supply to its LPG plant and Indraprastha Gas for city gas.

RIL is restricting output at 40 mscmd because of lack of government-identified customers

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