Reliance gas supply squeeze for GVK Power

GVK Power and Infrastructure Ltd (GVK PIL) is likely to take a hit on its power generation with gas supplies from Reliance turning unpredictable.

The plant load factors (PLFs) at its power generation units are likely to slip to as low as 70% at least for the coming two quarters with the gas supplies remaining inadequate.

According to the company officials, GVK has been facing problems in gas supplies since November last year and the impact of shortage in supplies has affected its power generation in the fourth quarter of the last fiscal.

The power units, which were operating at about 90% PLFs, have slipped on generation to operate at about 75% of the capacity.

The company operates about 1,178 mw capacity on gas supplied by Reliance from its Krishna-Godavari basin. The capacities are spread between Jegurupadu I (235 mw), Jegurupadu II (479 mw) and Gautami Power (464 mw), all located in Andhra Pradesh.

According to the company officials, GVK is currently pinning its hopes on the regasified liquefied natural gas (R-LNG) being supplied by the state government. However, these supplies, too, are expected to stop after May 2011. In case the R-LNG supplies stop completely and Reliance does not increase the gas supplies, the PLFs are bound to slip to about 70%, the officials said.

However, the company sees a silver lining in the form of a proposal pending with the Centre. The Centre is keen on diverting the gas supplies from non-core areas like steel to the core sectors including power and fertiliser. In case, this proposal goes through, then GVK is hopeful of getting its due gas supplies from Reliance.

Meanwhile, there is not much good news from Reliance.

According to the information available with the state government, the Centre, too, is keen on evaluating the gas output from the fields of Reliance in the KG basin.

Official sources said that Reliance has been maintaining the gas output under 50 mmcmd as against the earlier peak of about 61 mmcmd. “We have no information on any immediate plans of Reliance to increase the output. The Centre, too, is keen on evaluating the reasons for the lower output. There should be a status quo in the output at least till the central teams and the officials of the Director General of Hydrocarbons (DGH) are satisfied with the reasons for the output remaining at its low,” a source said.