Oil ministry allows diversion of gas for power plants

Last Updated: Thu, Jan 03, 2013 14:00 hrs

New Delhi, Jan 3 (IANS) In a move to increase electricity generation in India, the petroleum ministry Thursday notified guidelines for diversion of scarce gas between two or more power plants of the same owner.

An oil ministry release here said the step was being taken in view of "the fact that many power plants in the country are operating at low plant load factor (PLF) due to acute shortage in availability of domestic gas, leading to inefficient production of electricity".

PLF is a measure of average capacity utilisation, which can be affected by factors like non-availability of fuel and maintenance shut-downs.

The total gas-based power generation capacity in the country is nearly 19,000 MW. Gas available to the power sector is 55 million metric standard cubic metres per day (mmscmd), which can only feed around 10,000 MW capacity.

The ministry notified that the clubbing or diversion should not be for more than a year in total and should lead to higher production of electricity compared to during the pre-clubbing arrangement.

Further, the cost of the gas diverted would be according to the price based on the source of the diverted gas to avoid any financial burden on end consumers.

"The entity seeking clubbing/diversion would bear any additional financial liability arising from the existing and future Gas Sale Agreement (GSA)/Gas Transport agreement (GTA) and any other swapping transaction resulting there from," said the ministry.

The oil ministry also clearly specified that end-use of the diverted gas would remain power supply to state distribution companies (Discoms).

"This step should help many power plants operating at low capacity in improving their power generation," the statement added.

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