Andhra IPPs to file complaint against Reliance

Vol 15, PW 13 (12 Jan 12) Midstream & Downstream

Andhra Pradesh-based power producers are planning to file a formal complaint with the gas regulator against Mukesh Ambani-controlled Reliance for refusing to transport R-LNG to them through its 1440-km gas pipeline from Gujarat to Andhra Pradesh.

“Last month (December) we approached Reliance asking it to transport R-LNG from Gujarat but it refused,” complains an angry source. “I don’t understand why.

We are willing to pay the gas price plus taxes and levies.” Another source stresses that Reliance by law must operate its pipeline on a ‘common carrier principle’ which means it must reserve 33% of capacity for use by other companies.

Scarce domestic gas supplies, he adds, are forcing Andhra Pradesh’s gas-fired power stations to operate at just 40% capacity. In total, Andhra Pradesh’s gas-fired electricity generation capacity stands at 2760-MW.

Among those hit by gas shortages are GMR’s 388.5-MW Vemagiri station; Lanco’s 734-MW Kondapalli station; Konaseema Power’s 460-MW ‘combined cycle’ station at Ravupalem; a 208-MW station operated by Spectrum Power; and GVK’s Gautami and Jegurupadu stations, which together generate more than 900-MW. State-owned electricity distributor AP Transco is so desperate for power it is willing to buy electricity generated using expensive R-LNG instead of domestic gas.

One Andhra power producer says he informally approached PNGRB chairman S. Krishnan in mid-December to complain about Reliance’s alleged refusal to transport R-LNG.

“Krishnan refused to help us,” he claims. “Instead he suggested we should approach the oil ministry.

” But, he adds, Krishnan also said he would act against Reliance on receipt of a formal complaint. “Krishnan said the process could take a few months,” we hear.

Contacted by this report, Krishnan declined comment. Reliance defends its actions.