HPCL makes CNG comeback in Ahmedabad

Vol 17, PW 1 (08 Aug 13) Midstream & Downstream
     

When Hindustan Petroleum said it was closing its CNG pumps in Ahmedabad last December the future looked bleak.

But India’s second largest state-owned refiner is planning a CNG comeback with a resumption of sales in Ahmedabad from one ‘mother’ and 17 ‘daughter’ stations in September - this time using only R-LNG from GSPC or GAIL on a long-term contract. “We are in talks with both,” confirms HPCL.

“Let’s see who gives the best deal.” HPCL, with refineries in Mumbai, Vizag and Bhatinda, will need up to 60,000 cm/d to fuel the resumption of CNG sales.

"Demand for CNG has not gone up,” adds HPCL. “The figure was almost the same when we closed our stations.

” HPCL will most likely source R-LNG from GSPC, where it expects to close a deal at $16/mmbtu. GAIL by contrast is offering R-LNG at $18/mmbtu.

Getting a good deal will be crucial: HPCL enjoyed huge cost advantages over private sector rival Adani Gas because Delhi was only too happy to allocate it scarce domestic supplies: in 2009 it was the first CGD operator in Gujarat to benefit from D6 gas when the government allocated approximately 50,000 cm/d. When CNG sales resume in September, HPCL says it will charge similar to rivals GSPC Gas and Adani Gas who use only R-LNG.

GSPC Gas sells CNG at Rs63.30/kg ($1.03) while Adani Gas charges Rs65.80/kg ($1.07). “Depending on the deal,” says HPCL, “our price won’t be more than Rs68/kg ($1.11).