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India Plans to Revive Gas Power Generation With More Supply

July 16 (Bloomberg) -- Indian ministers will consider reallocating natural gas to factories and power plants at a meeting tomorrow, as supplies dwindle from the nation’s biggest deposit of the cleaner burning fuel.

A group of ministers led by Defense Minister A.K. Antony is scheduled to meet in New Delhi to discuss the reallocation, Oil Minister Veerappa Moily, also a part of the group, told reporters in New Delhi today. He declined to say how much gas may be given to power stations lying idle for want of fuel.

A decline in gas output for three years from the Reliance Industries Ltd.-operated field in the Bay of Bengal has affected supply to power stations, oil refineries and steel plants, forcing them to either shut down or buy more expensive gas from overseas. Production from the KG-D6 field off India’s east coast has dropped more than 75 percent in the past three years. Reliance says the field has proved more difficult to produce from then initially envisioned.

The government currently prioritizes gas supplies to fertilizer makers, followed by liquefied petroleum gas extractors and power generators. India had 20,359 megawatts of gas-based electricity generating capacity, or 9 percent of the total, as of the end of May, according to Central Electricity Authority data.

Gas production from Reliance’s KG-D6 field declined 39 percent to 336 billion cubic feet in the 12 months ended March 31 from a year earlier, the company said April 16. The drop was spurred by reservoir complexity and a natural decline in output, it said.

To contact the reporter on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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