State to ink pact with RIL on gas

T Sunil Reddy / TNN / Feb 15, 2006, 00:43 IST

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The AP govt will enter into a MoU with Reliance and GSPC by the end of this month for the supply of natural gas.

HYDERABAD: The Andhra Pradesh government will enter into a memorandum of understanding (MoU) with Reliance and Gujarat State Petroleum Corporation (GSPC) by the end of this month for the supply of natural gas from their gas fields located in the Krishna-Godavari basin.
Each of the companies reportedly agreed to supply 40 million metric standard cubic metres per day (MMSCMD) to meet the future energy requirements of the industries located in Andhra Pradesh.
The Infrastructure Corporation of Andhra Pradesh (Incap) will sign the MoU with both Reliance and GSPC and will act as intermediary between the industries and the two companies exploring natural gas in K-G basin.
Sources said Ernst & Young, which was tasked to assess demand for natural gas in the state, was in the final stages of preparing a report.

Once the report is ready, Incap will sign the MoUs with both Reliance and GSPC.
Though GAIL had promised 12 MMSCMD gas to industries in the state, it is not able to provide more than 4 MMSCMD, which has forced power projects to reschedule the production dates.
"Once the two private players start producing the gas, which is expected in next two to three years, Andhra Pradesh will become an energy surplus state,"Incap managing director L V Subramanyam told TOI.

As a first step to make use of the 80 MMSCMD gas, Incap is preparing ground to lay a gas grid across the state.
"We want to touch the last border point of AP, so that we will be in a position to supply gas to neighbouring TN, Karnataka and Maharashtra, which are facing energy deficiency,"Subramanyam pointed out.
Gujarat is now consuming 47 to 48 MMSCMD gas, which enabled industries in that state to reduce dependency on conventional mode of energy like electricity and diesel.
Initially, the government is proposing to lay the gas pipelines on the coastal corridor starting from Vizag to Nellore, and extend it to Hyderabad and other districts in Telangana and Rayalaseema in a phased manner.

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