Centre stops diversion of KG basin gas to Maharashtra

Conceding Andhra Pradesh's demand, the Centre has decided to stop diversion of natural gas from Krishna-Godavari basin to Maharashtra.

A day after a delegation, led by state Chief Minister N Kiran Kumar Reddy, met Prime Minister Manmohan Singh in New Delhi on the issue, the latter directed the Union Petroleum and Natural Gas Ministry to immediately stop diversion of two million metric standard cubic meters per day (MMSCMD) of natural gas to the Ratnagiri power plant in Maharashtra, sources in the CMO said.

The Prime Minister called the Chief Minister over phone and conveyed the decision," a CMO official revealed.

The Centre's decision comes as a relief to the power-starved AP, where the gas-based power plants were functioning with a plant load factor of less than 30 per cent, resulting into power cuts for several hours everyday.

The industries are the worst hit, as they are forced to follow a three-day power holiday every week due to scarcity of electricity.

It may be recalled that the Union Ministry of Petroleum and Natural Gas issued an order for diversion of two MMSCMD gas to Ratnagiri power plant, cutting into the supplies to Independent Power Producers in AP.

As a result of the gas diversion, the IPPs in AP would have got only 1.48 MMSCMD of gas, resulting in a drop in power generation by 400 MW.

Centre's decision created a storm in the state with opposition parties demanding the resignation of Union Petroleum and Natural Gas Minister S Jaipal Reddy, who hails from the state.

The Prime Minister, however, assured the CM-led delegation that the decision on gas diversion would be reviewed and accordingly he issued a fresh order this evening, a CMO official said.