Saumya DSM wants R-LNG for Mathura

Vol 15, PW 8 (20 Oct 11) Midstream & Downstream

Gas retailer Saumya DSM is talking to IndianOil and Bharat Petroleum to source R-LNG for Mathura in Uttar Pradesh.

Saumya met IOC representatives in September to buy 10,000 cm/d for its retail gas network in the northern Indian city, believed to be the birthplace of Hindu deity Lord Krishna. “Initially we want a one-year Gas Purchase Agreement (GPA),” confirms Saumya.

“After that, we will renew the contract or seek more gas based on our requirement.” Saumya, he adds, is also talking to BPCL for the same amount of R-LNG on a one-year contract.

“We’ll sign a GPA with whoever offers gas first,” we learn. Saumya signed a one-year GSPA with GAIL in April this year to buy 55,000 cm/d.

“But R-LNG from IOC and BPCL is cheaper,” we hear. “They levy ‘central sales tax’ on gas sales and raise invoices in Gujarat while GAIL invoices in Uttar Pradesh and charges 3% additional VAT (Value Added Tax).

” Saumya began drawing 4000 cm/d from GAIL on September 30, which it sells as CNG to cars and as piped gas to factories, businesses and households. GAIL sells this R-LNG to Saumya at around $13.5/mmbtu ‘delivered’.

But Saumya blames GAIL for delaying its plans to begin selling gas last April. “GAIL should have connected our city gate station at Chhatta (a village 30-km away) with a ‘tap-off’ on the Dahej to Vijaipur pipeline in January,” we are told.

“It was done only in April. They installed a ‘metering skid’ (to measure gas sales) only in May.

” Saumya complains it also faced hurdles acquiring land for its gas pipelines connecting CNG stations and the ‘District Regulatory System,’ and was forced to change the route of several pipelines. “We only ‘purged’ the pipelines by September 15,” we learn.