Oil India hit by gas consumer shutdown in Assam

Not only has Coronavirus hit Oil India's gas demand but unrelated shutdowns by customers in Assam are a worrying development.

Take one of Oil India's largest gas consumers, Namrup-based Brahmaputra Valley Fertilizer Corporation (BVFC), which has closed down for maintenance. BVFC usually buys 1.72m cm/d from Oil India through Assam Gas.

"As of March 14, the day their shutdown began," says an Assam Gas source, "they were taking only 300,000 cm/d for their captive power plant." He adds the company planned to resume gas purchases by end-March but with the government's lockdown from March 24 that has not happened.

Assam Power Generation Corporation's 119.5-MW thermal power station, also at Namrup, is another example. Still awaited is a replacement for one of its gas turbines, which it wanted to commission by December (2019) but which was delayed because of Assam-wide protests against the controversial Citizenship (Amendment) Act, 2019.

"Gas demand at the power station is limited to 440,000 cm/d from the usual 660,000 cm/d," says a source. In turn, this is affecting other customers like Brahmaputra Cracker & Polymer (BCPL), which usually takes up to 6.1m cm/d gas but only uses 1.35m cm/d with the rest returned to Oil India as lean gas for sale to others.

But because of a lack of customers, Oil India sees no point in receiving the lean gas back from BCPL. As a result, Oil India has cut BCPL's supplies.