Gas from ONGC's marginal fields for Tata Power

Vol 7, PW 2 (09 Apr 03) People & Policy

VANDREWALAS LETTER is a striking example of the scramble for scarce quantities of gas in India's energy-hungry market.

His plea is clear: if gas is scarce, there should be no favouritism when deciding supply cuts to customers. "Current gas supplies to Trombay Thermal Power Station are among the lowest as a percentage of contracted quantities.

Some consumers are being supplied more gas than their present allocation." Naik hasn't yet replied to Vandrewala but clearly the Tata Power MD is unwilling to accept his fate: Tata Power is now aggressively exploring alternate, dedicated gas supply sources from ONGC's marginal fields offshore Mumbai. Three fields have been identified (C22, C24 and C39) and preliminary talks have begun.

Tata Power says it can absorb up to 4m cm/d from these and other fields at "market determined prices." We also learn that Tata Power is banking on new gas finds by ONGC in the Mumbai High region and "would be willing to participate with ONGC in a mutually acceptable manner with a view to meeting Trombay's present and future gas requirements." In his letter, Vandrewala reminds Naik that the Trombay Power Station was the first user of Bombay High gas when it was brought onshore in 1978. "Besides providing an outlet for the gas, which otherwise was being flared, Tata Power also provided to ONGC a plot of land for locating their terminal at Trombay." As Bombay High gas production increased, so did Tata Power's consumption and at times it was using up to 3.5m cm/d gas even though its original contract was for only 1.5m cm/d.