No gas to Andhra IPPs from ONGC and GAIL

Vol 8, PW 19 (15 Dec 04) Midstream & Downstream


On 16th November, CEA chief HL Bajaj accused ONGC offshore director NK Mitra and GAIL general manager marketing MM Mandal for not fulfilling their commitments to supply enough gas to five gas-based power projects: 230-MW GVK Phase-I 208-MW Spectrum Power Generation 170-MW Vijjeshwaram project of AP Gas Power Corporation 350-MW Lanco Kondapalli project 230-MW Samalkot project of Reliance Energy DK Panwar, principal energy secretary AP government and Rachel Chatterjee, chairperson APTRANSCO, complained to Bajaj that the gas supply agreement signed between GAIL and the IPPs are one sided. The minimum offtake of gas by these IPPs is 80% but there is no penalty on GAIL if it does not supply 80% of gas.

They alleged that GAIL is invoicing full fixed charges from the IPPs even when it transmits less gas. Invoicing needs to be done on a pro-rata basis to the amount of gas supplied.

But instead of giving an explanation, Mandal blamed the oil ministry and attributed the shortfall directly to the Gas Linkage Committee. He said that the total gas requirement of Andhra Pradesh is 9.4m cm/d of which about 7.2m cm/d is available.

The GLC has been allocating gas more than gas availability, said Mandal. The total gas allocated by the GLC to Andhra is about 16.8 m cm/d.

Mitra was very blunt. He said ONGCs gasfields in Andhra Pradesh are small and do not have large quantities of gas.

There is no possibility of additional gas from these fields, he said. Mitra said that ONGC estimates future gas availability of about 7m cm/d for AP but that it still has no firm numbers.

Availability of gas from our G-1 structure will be about 2m cm/d, said Mitra. That will last for about two years and thereafter start declining.