Anil Ambani seeks gas allocation for 2400MW Samalkot project

With completion of its 2,400-Mw gas-based power project at Samalkot in Andhra Pradesh, Reliance Power has made a case for gas allocation with the government.

Its chairman, Anil Ambani, has written to Prime Minister Manmohan Singh seeking allocation for 9.6 million standard cubic metres a day (mscmd). He has also sought that gas allocated to non-priority sector users be reallocated to the priority sectors of power and fertilisers.

In his letter, Ambani has said while the ministry of power has recommended gas allocation of 9.6 mscmd for the Samalkot project, the request is pending allocation since an empowered group of ministers (EGoM) is yet to meet. “It has been over 18 months since the last meeting of the EGoM in July 2010 and many projects such as Samalkot are awaiting gas allocation for their commissioning activities,” said the letter sent recently.

Stating that the Supreme Court in its ruling on the Reliance Industries Ltd (RIL) versus Reliance Natural Resources Ltd (RNRL) case in 2010, had ruled that the group’s demand for gas allocation should be considered in line with government policy, Ambani said, “We are now ready for the plant commissioning...We fulfill all requirements for gas allocation as outlined by the gas utilisation policy.”

RNRL now stands merged with RPower. Ambani had led a high-pitched war of words with both the government and RIL for getting natural gas.

The Samalkot project has a small gas allocation from RIL’s KG-D6 block but with the capacity enhancement, the plant requires more gas. The plant expansion has $600 million funding from the US Exim Bank.

The chairman of the ADA Group has also said that in adherence to the principle of equity, all available gas for the power sector be equitably provided to all projects on an equal plant load factor basis, so that they can achieve minimum viability until supplies ram-up.