The Chief Minister N Kiran Kumar Reddy, in Delhi, felt that the pact with Gas Authority of India Limited would aid the state much. As per the pact GAIL has agreed to supply gas to the power plants of the state. This would enable the power projects to produce at much lower costs. CM expressed his views while attending the pact signing in the presence of the Union Minister S Jaipal Reddy. He also said that low power production costs will result in high progress of the state.
CM clarified that by this pact GAIL shall supply gas to the power plants in the state. The cost of production prior to the gas supply approximately costs Rs 4 - 5 Cr per Mega watt of production. It may be noted earlier Union Oil Ministry officials had stated that Gail India will provide 2.5 million standard cubic metre per day domestic gas to fuel-starving power units in Andhra Pradesh from the share of its LPG plant and meet the shortfall with imported gas by a revenue neutral swapping arrangement. The supply would be however compensated by the Oil ministry by supplying the same quantity of R-LNG without any additional cost. The assurance did take the shape of the pact felt sources. The swap ended on March end. (With inputs from internet: AarKay)