Merger, what merger? Sabarmati looks ahead

Vol 19, PW 3 (08 Oct 15) Midstream & Downstream

Sabarmati Gas is about to disappear, swallowed up by GSPC-owned Gujarat Gas.

But this hasn't dented its plans to sharply increase gas supplies to the newly-created Aravali district of Gujarat, encouraged by the government's decision to further slash domestic gas prices. Sabarmati is betting on increased gas demand from CNG stations and homes after the oil ministry reduced the domestic gas price from $4.66/mmbtu to $3.82/mmbtu on September 30 for the six months from October 1, 2015 to March 31, 2016.

Carved out of Sabarkantha district in 2013 and with its administrative headquarters at Modasa, Aravali is fast emerging as an education hub with law, science, arts, commerce, education, pharmacy and business colleges. “We see a lot of scope in Modasa!" says a Sabarmati source.

Sabarmati is permitted to supply gas to Gandhinagar, Mehsana and Sabarkantha districts and sells around 680,000 cm/d. Of this 430,000 cm/d is imported R-LNG for factories and businesses while 250,000 cm/d gas produced in India is sold as CNG and as piped gas to homes.

By the end of this fiscal Sabarmati expects total sales to rise to 700,000 cm/d, possibly more, with CNG sales rising by 12-14% and piped gas for homes rising by 10%. By contrast gas sales growth to factories and businesses is expected to be marginal because these industries still prefer cheap fuel to expensive R-LNG.