Gujarat Alkalies and Chemicals joins D6 gas queue

Vol 13, PW 23 (06 May 10) Midstream & Downstream

India’s largest caustic soda manufacturer Gujarat Alkalies and Chemicals wants a D6 gas allocation to replace expensive Dahej R-LNG, and because it is frustrated waiting for C-Series gas from ONGC.

PETROWATCH learns the Gujarat government-owned company applied on February 11 to the department of chemicals and petrochemicals for 600,000 cm/d of D6 gas, and that the proposal was forwarded to the oil ministry in April. “Gujarat Alkalies needs this gas for its upcoming captive power station in Gujarat,” confirms a company source.

Gujarat Alkalies, he continues, is setting up a new 115-MW captive gas-fired power station at its Dahej chemicals factory in south Gujarat, at an estimated cost of Rs350cr ($78.9m). This is in addition to the 90-MW captive power station it already has at Dahej, which was converted from using liquid fuels like naphtha and high speed diesel to gas back in 2002.

Gujarat Alkalies’ Dahej complex currently receives 235,000 cm/d of R-LNG supplied by GAIL from the Petronet-LNG Dahej LNG terminal, which it hopes to replace with cheaper D6 gas. On May 16 last year the company signed a contract with GAIL for 60,000 cm/d of C-Series gas from ONGC: 50,000 cm/d for its other petrochemicals factory at Vadodara and 10,000 cm/d for Dahej.

“Frankly, we have no information at this stage about when those supplies will begin,” we hear. “It has been almost a year since we signed the first contract.

We are still waiting for C-Series gas.” Gujarat Alkalies, we hear, will receive C-Series gas from GAIL at $5.5/mmbtu for nine years after supplies begin.

Gujarat Alkalies’ Vadodara complex has a total gas requirement of 105,000 cm/d. “For Vadodara, GAIL supplies Gujarat Alkalies with a mix of PMT gas and R-LNG from Dahej,” says our company source.