Gujarat Gas complains about GAIL gas shortfall

Vol 6, PW 4 (24 Apr 02) Midstream & Downstream

DWINDLING GAS supplies from GAIL have forced a desperate Gujarat Gas, owned by British Gas of the UK, to seek the personal intervention of oil minister Ram Naik.

We understand there's a note circulating in Shastri Bhawan from former GAIL chairman CR Prasad, now chairman of British Gas India, sharply criticising a series of cuts in gas supply that GAIL has imposed on Gujarat Gas, forcing it to scale back transmission to its 33,000 domestic and 460 commercial customers in Ankleshwar and Bharuch. Most recently, writes Prasad, "On 17th March GAIL intimated us that our allocation stands at 40,000 cm/d." Contrast that with a high of 1.7m cm/d first allocated to Gujarat Gas for transmission to Ankleshwar and Bharuch in 1988, and subsequently renewed by contract in 1994 and extended till September 2001.

Problems began a month later: in October 2000 GAIL converted its "firm" contract with Gujarat Gas into a "fallback" contract; followed by a series of sharp cuts, first on 2ndFebruary this year when GAIL cut supply to 1m cm/d, then on 8th February when it cut supply to 92,700 cm/d and finally last month on 17th March when GAIL cut supply to 40,000cm/d. Prasad warns of job losses and harm to local industry if the government does not force GAIL to resume delivery of 1.7m cm/d.

"These industries are completely dependent on gas for their operations," he writes. "If a significant gas cut is imposed on Gujarat Gas its small industrial consumers would be forced to shut their industries."