GAIL, RIL to swap KG gas: OilMin

New Delhi: Gas utility GAIL and Reliance Industries is to enter into a swap arrangement to facilitate optimum use of available natural gas in the country. An oil ministry statement on Monday said since gas from the latter's Andhra offshore field cannot be used for making petrochemicals, the state utility will exchange suitable gas with the Mukesh Ambani-led firm's petrochem units that have been allocated nearly 2 mcmd (million cubic metres per day) from India's biggest gas field.      According to the statement, the ministerial panel for distributing Andhra offshsore gas has also said GAIL will supply adequate quantities to its existing consumers to make up for any "shrinkage'' in supply of rich gas. Gas swap is not uncommon in industry as using 'rich' gas — from which petrochem can be extracted and costs more — for firing industrial burners entails loss of value-addition.      The panel had on October 27 identified consumers for incremental increase in production from the Andhra offshsore field beyond the present 40 mcmd it is pumping. Bulk of the additional output has been allocated to power plants, followed by petrochemicals, refineries, city gas projects and fertiliser units.      The statement said against the demand of close to 30 mcmd, 10 mcmd has been allocated to captive power plants on fallback — or temporary — basis. The petroleum ministry will identify the plants and quantity to be supplied to each of them in consultation with power ministry within a month. The captive plants will get gas after needs of the priority sectors are met.      The government had earlier identified users for the first 40 mcmd output from the Andhra offshsore field. Of the initial output, 18 mcmd had gone to power plants. An additional 12 mcmd has been allocated to existing power plants if the output stabilises above 65 mcmd. NEED TO ROPE IN PRIVATE SECTOR