Rajasthan Gas sees good Kota CGD potential

Vol 19, PW 14 (24 Mar 16) Midstream & Downstream

Starting with a base at Kota, a town known for producing beautiful saris, Rajasthan State Gas (RSGCL), a joint venture of GAIL Gas and the Rajasthan State Petroleum Corporation, is planning to significantly expand its retail gas network across picturesque desert state Rajasthan.

A first step in this direction was taken on March 2 when it signed a five-year gas sales agreement for 10,000 cm/d of gas with Global Ceramics which is setting up a factory at emerging ceramics hub Ghilot, to be sold at the landed Dahej R-LNG price of August 2016 plus transportation costs. This is just the beginning: Rajasthan Gas sees demand at Ghilot rising to 40,000 cm/d over the next three years with the arrival of more factories - a major factor behind its decision to take control of the established GAIL Gas network in Kota.

On February 27, the two inter-related companies signed an informal 'business transfer agreement' in Jaipur. In place is a short-term, one-year business plan with a CAPEX of Rs460cr ($48m) to connect 2000 more homes to a 40-km steel and 53-km plastic pipeline network laid by GAIL Gas.

This involves laying 6-km of pipeline within the next four months, increasing to 10-km within a year. "We'll also set up four CNG stations and supply gas to the industrial cluster at Tonk (one of the most underdeveloped districts in the country)."