Hyderabad: Gas-starved power generating stations in Andhra Pradesh can now hope to purchase some fuel from external sources under the new "swapping policy" brought in by the Union Ministry of Petroleum and Natural Gas.
An installed capacity of 6500 MW in Andhra Pradesh has been lying idle for many months now, pushing the state into an unprecedented power crisis, due to non-availability of gas.
"In western India, we have supplied some gas to fertiliser projects. Here we have to give to power projects. We may swap it. We will allow the companies (power and fertiliser) to swap gas with the consent of respective state governments.
"I have now worked out a new formula on swapping the price", Union Petroleum and Natural Gas Minister M Veerappa Moily told reporters here this evening.
During his meeting with Moily earlier in the day, Chief Minister N Kiran Kumar Reddy requested the ministry to allocate an additional 9 to 10 mmscmd gas till 2014 to bridge the gap between supply and demand of electricity.
"Unfortunately because of various uncertainties in contractual obligations and many other problems...No further excavation (of gas) was done. Even what was contemplated from the excavation already done, also came down heavily....As a result it has suffered...We are sorting it out", Moily said.
"Rules are already finalised (for gas swapping) and we will apply them now. The swapping will be for a higher price only", he said in reply to a question.
Moily said an LNG terminal has been opened at Dabhol and one cargo has already come. "Oil has also come. GAIL will pump that oil into the system. I think slowly I am trying to organise the system", he added.
On gas allocation (for different projects), Moily said the Empowered Group of Ministers had already fixed the priorities.
"We have to go according to the formula. Unless it is changed by the EGoM, I can't change (it) myself. Fertiliser gets the top-most priority", he said.
"Gas explored from the NELP blocks would also be governed by the EGoM formula", Moily said.
Meanwhile, the Chief Minister's Office (CMO) informed in a press release that the Union Minister has agreed in principle to the expansion of HPCL oil refinery at Visakhapatnam and also establishment of a new greenfield refinery at the Petro-Chemical and Petroleum Investment Region.
The proposals involve a total investment of Rs 40,000 crore, the statement said, adding, "Moily has asked HPCL to work out details of the projects".
"He (Moily) has also asked his ministry officials to co-ordinate with the state government on the projects", the release added.