Under a so-called gas swapping arrangement, Hyderabad-based Bhagaynagar Gas (BGL) and power plants in Andhra Pradesh would get natural gas from Reliance Industries’ KG-D6 fields.
The gas would be supplied to BGL and power plants in Andhra Pradesh by diverting a part of gas allocated to Rashtriya Chemicals and Fertilizers (RCF) from RIL’s fields.
Under the swap arrangement, state-owned gas firm GAIL India will make good the shortfall at RCF’s Thal urea manufacturing plant by supplying imported liquefied natural gas (LNG).
While BGL and power plants will pay the actual price of imported gas, RCF will pay only $4.2 per million British thermal unit, the rate at which it had contracted KG-D6 gas.
This follows an order from the union oil ministry that a part of 2.1 million standard cubic metre per day of KG-D6 gas allocated to the RCF plant be diverted to Andhra Pradesh power plants.
Some reports indicate that with KG-D6 output dipping below 15 million standard cubic metre per day, there was hardly any gas left after meeting the requirement of urea manufacturing plants who had been given top priority in receipt of the scarce fuel.
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