Sabarmati expands despite flagging gas sales

Vol 16, PW 15 (21 Feb 13) Midstream & Downstream

Believe it or not Gujarat-based gas retailer Sabarmati Gas is determined to aggressively expand its CGD network despite flagging demand.

Sabarmati believes connecting more factories to its gas grid is the only way to increase sales and beat the economic slowdown. “Within the next six months we plan to provide gas at four new and emerging industrial clusters around our established supply areas of Gandhinagar, Sabarkantha and Mehsana,” says a Sabarmati source.

Sabarmati, he adds, plans to complete a 4-inch diameter, 20-km steel pipeline by June from ancient Visnagar city, once known as the 'copper city', to the industrial cluster of Vadnagar on its outskirts. Sabarmati plans to supply gas to three small factories at Vadnagar in Mehsana district.

Also by June, Sabarmati should complete another 4-inch diameter, 20-km steel pipeline from tiny Mansa city to rapidly industrialising Vijapur in Mehsana to supply five or six factories. And by September Sabarmati will complete a 4-inch diameter, 30-km steel pipeline from Himmatnagar town (literally meaning 'town of courage') to Idar city in Sabarkantha district, formerly the seat of a princely state.

Sabarmati will supply gas to factories in the Gujarat Industrial Development Corporation (GIDC) estate in Idar. In September, Sabarmati will also commission a 4-inch diameter, 30-km steel pipeline from Prantij to Rozad in Sabarkantha to supply five or six factories in the GIDC industrial estate at Talod, 5-km away.

"We have lined up initial customers in these clusters," says Sabarmati. "More customers will sign up once gas supplies begin.

" Sabarmati expects to be selling a total 60,000 cm/d in the next six months at Vadnagar, Vijapur, Idar, and Talod.

By January 2014, Sabarmati also aims to complete a 4-inch diameter, 15-km steel pipeline from Dahegaon to the emerging Galudan industrial cluster, 10-km from Ahmedabad. Sabarmati sells gas mainly to ceramics factories and hopes its new industrial customers from the metals and chemicals sectors will provide the much needed diversification in its customer portfolio. It has contracted 1m cm/d of gas supplies to 565 factories and businesses and 70,000 households and also owns 27 CNG stations selling fuel to cars and buses. "But actual industrial consumption has fallen to around 60% of 'connected load' (contracted supplies) because of the economic slowdown,” we learn. CNG sales in sharp contrast have shown a robust growth of 20% in 2012-13 while piped gas supplies to households have grown 4%. Sabarmati's total gas sales for 2012-13 stand at 770,000 cm/d, 7% higher than the previous year. Of this, 71% goes to factories and businesses; 4% goes to households and 25% is sold as CNG. Sabarmati is selling 150,000 kg/day of CNG. By September it will add eight more CNG stations taking total sales to 180,000 kg/day. Sabarmati believes expanding its pipeline network will increase gas sales by 15% in 2013-14 to 880,000 cm/d. It sources 400,000 cm/d as R-LNG from Petronet-LNG under a 20-year contract and also buys the rest of the gas its needs from the spot market or on short-term contracts.

Sabarmati expands despite flagging gas sales

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