Dirty coal back in favour with Gujarat textile mills

Vol 13, PW 9 (08 Oct 09) Midstream & Downstream

Gujarat Gas, the sole gas distributor in Surat, will be worried: for the past six to eight months textile-processing mills in this area have been switching from natural gas back to dirty coal and lignite.

Industry estimates put the number of mills that have either converted partially or fully over this period to conventional â€کthermo-pack’ technology (where oil is heated in a boiler fired by coal or lignite to generate steam) at between 40 and 50, with 18 to 20 new coal and lignite-based mills planned. Low-availability of gas and high prices compared to coal are responsible for this phenomenon in Surat, which produces 4m metres of polyester and blended cloth every day, making it one of the largest textile production centres of India.

Arun Zariwala, president of the Surat Cloth Manufacturers Association, tells us the production cost per metre of cloth using coal is Rs8-9 but Rs14-15 using gas. “We obviously prefer gas to coal and lignite,â€‌ adds Pramod Chaudhary, president of the South Gujarat Textile Processors Association, whose own Pratibha Fabrics is switching back to coal and lignite.

“But gas is not available in the quantities we need and whatever is available is expensive. This erodes our competitive edge.

â€‌ In Surat, gas demand among textile mills totals 300,000 cm/d, but BG-owned gas retailer Gujarat Gas supplied only 167,000 cm/d in September 2009. In its defence, Gujarat Gas says it was hit hard when the government decided to divert gas supplies from the Panna, Mukta and Tapti fields completely to GAIL in 2008.

Since then, Gujarat Gas has also missed out on D6 gas, forcing it to restrict supplies to industrial customers, who are paying Rs11.50/cm for normal supplies. Any gas drawn in excess of permitted levels attracts a price of Rs14.975, revised downwards by Rs1.005 from October 1.

“With taxes our price works out at Rs17/cubic metre,â€‌ says one consumer. By contrast, coal costs Rs3000-4300/tonne, depending on quality, while lignite is even cheaper, at Rs2035-2240/tonne.