ONGC refuses gas for Reliance cracker in Assam

Vol 6, PW 3 (10 Apr 02) Midstream & Downstream

TIME IS running out for Reliance and its proposed gas cracker in Assam.

Last November the state's armed separatist group United Liberation Front of Asom threatened to "punish it" unless it immediately started work. Now, Assam chief minister Tarun Gogoi has given Reliance time till 1st October.

Otherwise they can go and we will seek out somebody else, an angry Gogoi tells PETROWATCH. He added: I am fed up with this delay and I will not stand this endlessly.

Delhi promised Assam a gas cracker as part of a deal to end a violent and prolonged period of student unrest against 'neglect' of development activities and in 1992 Reliance signed a MoU to set up a 5m t/y plant. Since then not a brick has been laid.

State authorities have acquired land for the project at Lepetkata but Reliance wants an assured supply of 6.35m cubic metres per das at a fixed price. In November 2000 Oil India signed an agreement to supply 5m cm/d but ONGC is unwilling to sign an agreement for the balance 1.35m cm/d because it is unsure it can meet its commitment.

Our gas fields in Assam cannot supply that much though we have proven reserves, an ONGC official at Nazira tells PETROWATCH. Reliance is unimpressed.

Unless we have contractual agreement for 6.35m cm/d theresno way this project will be viable. ONGC wants Reliance to scale down the project size to 2m t/y but Reliance is unwilling saying this is not viable.