Gas supply cuts for south Gujarat and Mumbai too

Vol 7, PW 23 (11 Feb 04) Midstream & Downstream

Dwindling gas supplies from ONGC is bad news for industrial consumers in south Gujarat and Mumbai too.

The 13th January Gas Linkage Committee meeting was told that actual gas availability in south Gujarat has now fallen to about 3.6m cm/d against the allocation of around 9.5m cm/d. More supply cuts are inevitable.

GAIL presented a revised action plan for supplies to south Gujarat consumers. Luckily, there will be no cuts in gas supplies to essential and strategic sector industries such as C2/C3 recovery, LPG recovery and the Heavy Water Plant.

Equally privileged will be consumers paying compression charges for delivery of low pressure gas. However, supplies to industries with an allocation below 50,000 cm/d gas will be made, according to their operational viability.

The balance, non-compressed gas will be supplied pro-rata to all consumers. As with ex-Hazira and ex-HBJ consumers, we are told that the gas shortfall in south Gujarat may be met by regassified LNG that will be available from Petronet-LNG from April 2004.

The gas supply situation in the Mumbai region is equally bleak. Allocations are around 16.6m cm/d while supply is slightly more than 9m cm/d.

GAILs revised action plan will mean supply cuts to consumers in this region too as elsewhere, but the steel ministry strongly argued for an increase in supplies to the private Vikram Ispat Industries. It emerges that the safe operation of this factory requires a minimum 0.48m cm/d gas, while supplies are now around 0.43m cm/d.

The fertiliser ministry complained that the private Deepak Fertilisers is operating below viability due to falling gas supplies. The chemicals and petrochemicals ministry wanted supplies to (Reliance-owned) IPCL to be protected as this was one of the assurances given by the government before privatisation.

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