Reliance cuts gas to state Power Company

In a major blow to the power-starved state, Reliance stopped supply of gas to the AP Gas Power Corporation Limited at Jegurupadu in East Godavari on August 3 citing its conversion into a private company as the reason.

Taking note of the new equity composition, the Centre also allowed Reliance to stop the supply from KG basin D6 well.
Troubled by this, the Chief Minister, Mr K. Rosaiah, on Friday wrote a letter to the Union minister, Mr Murli Deora, requesting him to urgently assure firm allocation so that the power projects in the state would get required gas.

Reliance has been supplying 0.5 million metric cubic meters of gas per day to APGPCL helping it generate 272 MW power.
?It was formed as a joint venture of a few private companies and the erstwhile APSEB,? said a senior APGenco official. ?Later, private companies including GVK Power increased their stake, pushing the government to a minority position.?

Despite this, APGPCL continued to command a status equal to a government company but Reliance took note of the changes and submitted a report to the Union petroleum ministry listing APGPCL as captive power unit.

Since the EGoM did not allow supply to captive units, the Centre asked Reliance to stop supply.

At present, the project is running with 0.9 MMSCD natural gas supplied by GAIL. In fact, GAIL had promised to take care of the total need of the plant in 2003. But it could not fulfil the promise because of severe gas shortage in the Ravva basin. After Reliance started operations in the KG basin, it agreed to give gas to some of the stranded power units in which APGPCL was also included.

Now, both Reliance and Centre are unwilling to give the project gas till the government equity is raised to 51 per cent. Baffled by the adverse reaction from the Centre, the CM on Friday wrote to Mr Deora saying that with four thermal units under outage, the state was facing 460 MW shortage at peak time and needed gas urgently.

Source: Deccan Chronicle, Hyderabad, Sunday, 8th August 2010
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