Dispute delays 2nd round of Gujarat CGD licences

Vol 7, PW 22 (28 Jan 04) Midstream & Downstream

Gujarats high profile local gas distribution policy is in trouble.

Serious differences within the energy department over the selection of zones are delaying the announcement of the second round of local gas distribution licences. Gujarat State Petronet CEO DM Desai and Energy secretary Dr Manjula Subramaniam are in dispute over the locations to be advertised in the second round.

The government wants to classify gas distribution zones by districts but GSPL wants to concentrate on towns and cities, a source tells PETROWATCH. GSPL is constructing pipeline infrastructure to facilitate city gas distribution across the state and believes the state governments hardline stance could render several kilometres of its pipeline useless.

It does not make economic sense to offer an entire district which has hardly one or two industrial towns and only a few hundred in urban centres, a Gujarat Petronet source tells us. But the government is convinced that no change is required.

The first round has been successful, says a source. There is no need to alter the interim policy and include smaller circles.

Gujarat Petronet disagrees. Sabarkantha is the best example, says GSPL.

Bharat Petroleum has won Sabarkantha district as a circle but it has only a few industries and hardly any residential users. Himmatnagar town is the only promising area in this region.

Instead of offering the entire district of Sabarkantha, only the town should be offered. Gujarat governments director of petroleum RN Joshi dismisses talk of controversy.

There is no tension, he tells PETROWATCH. We are examining several different options.

Yet disagreement clearly persists and this has cast a shadow over a pending announcement for the second round. If the government wins the argument, the districts on offer would be: Surat, Navsari, Banaskantha, Patan, Jamnagar, Porbandar, Junagadh, Amreli, Anand, Kheda, Panchmahal, Dahod, Narmada and Bharuch.