Lucknow has two gas retailers and lots of confusion

Vol 10, PW 23 (22 Mar 07) Midstream & Downstream

Lucknow in Uttar Pradesh is not only the capital of India’s most populous state, it is also set to become a test case for the country’s future gas regulator.

Two companies are competing for the City Gas Distribution business in Lucknow. Green Gas, a joint venture between GAIL and Indian Oil, has central government permission; the other, Adani Energy, has state government permission.

Should two companies be allowed to compete for the same market Does permission from Delhi override permission from Lucknow Or vice versa “It’s not clear,â€‌ Green Gas tells us. “Green Gas has been regularly writing to the oil ministry on this matter.

Nothing is likely to be decided until the regulator is in place.â€‌ Green Gas was incorporated on 7th October 2005 between GAIL (22.5%), Indian Oil (22.5%), UP state authorities (5%), banks and the public (50%) to set up a CGD network in Lucknow.

Without seeking NOC approval, the company moved fast to set up a CNG network with a gas â€کallocation’ of 100,000 cm/d. On 2nd April 2006 it opened the city’s first â€کmother’ station and has since set up three â€کdaughter’ stations.

A second â€کmother’ station at Gomtinagar is under construction. Total CNG sales are around 22,000-kg per day to approximately 3500 vehicles.

Adani Energy is likewise moving fast. On 10th February last year it won a NOC from Lucknow and has so far readied 15-km of a 30-km eight-inch steel pipeline, which it hopes to complete in three months.

It has also been allotted land to set up a CNG station. Adani’s entry to Lucknow is creating problems for Green Gas.

Aware of the potential for conflict, state authorities have withdrawn all RoU permission to Green Gas for its CGD network in Lucknow until clarity emerges on who has the right to operate in the city: Green Gas or Adani Or both Adds Green Gas: “Even the regulator (when appointed) can not ignore a NOC issued by the state (to Adani).â€‌ Over to you, Mr.