CAIRN: In trouble over Raageshwari gas sales

Vol 18, PW 13 (26 Feb 15) Midstream & Downstream

Both the Rajasthan government and the DGH have attacked Cairn’s plans to sell gas from its Raageshwari Deep Gasfield in Rajasthan to Gujarat State Petronet (GSPL) at Palanpur.

In the last week of December (2014) the Rajasthan government wrote to the oil ministry saying Raageshwari gas sales should take place only within Rajasthan itself. In early January the ministry asked the DGH for its opinion, which endorsed the Rajasthan government’s view.

“The DGH raised the question of the delivery point,” says a GSPL source. “It has categorically said the delivery point is at the Barmer field and cannot be extended to Palanpur.

” The DGH cites Article 1.23 of the PSC, which states the delivery point must be the outlet flange at Raageshwari. “Palanpur is 200-km from Raageshwari,” explains a Rajasthan government official.

“So it would be classified as an additional delivery point and would be beyond the purview of the Management Committee (MC).” Cairn already supplies 254,000 cm/d at $8.40/mmbtu since August 2014 from the Wankaner delivery point in Gujarat to GAIL, Gujarat Narmada Valley Fertilisers (GNFC), Gujarat Gas, and China Light & Power’s 655-MW Paguthan power station.

But Rajasthan officials were blissfully unaware of this until Cairn wrote to the ministry seeking Palanpur as an additional delivery point. Cairn did not respond to text messages, phone calls or emails.

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