Piped gas for domestic customers in Krishna Godavari

Vol 3, PW 21 (10 Nov 99) Midstream & Downstream
     

Piped gas is a distant dream for most Indians but it could soon become reality for up to a million households in Andhra Pradesh.

This report learns ONGC is examining proposals to divert up to 500,000m cubic metres a day (cm/d) of gas from its producing fields in the Krishna Godavari basin to domestic consumers in urban centres nearby. Indu Bhushan Raina, head of ONGCs Krishna Godavari Project, tells this report he has received the first draft of a study undertaken by the private consultancy firm Projects India Development Ltd (PIDL) on the feasibility of piping natural gas to customers in Kakinada, Rajahmundry, Amalapuram, Nursapur and surrounding areas of Andhra Pradesh.

Similar gas distribution programmes are already underway in Mumbai (British Gas and GAIL-backed Mahanagar Gas), Delhi (Indraprashta Gas), Assam (Assam Gas Company) but for southern India this will be a first. Raina tells this report he believes piped gas in the Krishna Godavari region will eventually replace LPG cylinders, which is the most common source of cooking fuel in India.

His assumption is based on a finding by the PIDL study that the average cost to a consumer of 15 cubic metres a day of gas (equivalent to one LPG gas cylinder) is only Rs40-50 while the cost of a cylinder is on average Rs200. Raina predicts a significant business opportunity for any private sector company willing to invest money in a small gas grid and promises to release the PIDL study (free of charge) to interested companies.

Is this project a further sign that ONGC is getting desperate to find a market for its Krishna Godavari gas Clearly, yes. Raina confirms that ONGC has received permission from the Gas Linkage Commission, attached to the Ministry of Petroleum & Natural Gas, to find a market for 9m cm/d of gas by 2002.

Existing production in the Krishna Godavari Projects stands at 4-5m cm/d, but is increasing on average by 50% per annum.