Adani awaits GAIL connectivity for three CGD networks

Vol 10, PW 25 (19 Apr 07) Midstream & Downstream

Adani Energy is waiting for connectivity from GAIL pipelines to switch on three city gas distribution networks in north India.

Adani tells us its CGD networks in the Delhi suburbs of Noida and Faridabad and the Uttar Pradesh capital Lucknow can supply gas to customers only once connectivity is established with GAIL’s HBJ trunk pipeline. “In these three cities we are almost in front of the GAIL facilities,â€‌ we are told.

“GAIL has to set up custody transfer arrangements, metering skids, pressure regulators, safety accessories and other facilities on their system before we can start drawing gas.â€‌ Also incomplete is the gas transmission agreement.

Both sides have exchanged drafts of the agreements and Adani has agreed to GAIL’s terms of 97% use-or-pay plus annual rent of 97-paise/cubic metre transmission tariff. But GAIL is yet to inform Adani of the connectivity charges.

Most likely, GAIL will follow the “standard guidelinesâ€‌ from the Tariff Advisory Committee. “We don’t see any issue there,â€‌ says Adani, which originally planned to begin CGD supplies in Noida by March.

Present estimates are that supplies can begin around July. For Noida, Adani and GAIL have identified a tap off point on a pipeline from Dadri.

“This pipeline passes through Noida and the tap off point is just 500 metres away from our receiving station,â€‌ says Adani. Two out of five CNG stations planned for Noida are almost complete and so is a 28-km steel pipeline ring to supply industries.

To supply Faridabad, the tap off point will be about 10-km away on the Chainsa to Gurgaon pipeline. At Faridabad the initial focus will be on industrial customers.

A 30-km steel ring is partially ready and will be complete by the end of May. “These steel rings will be the backbone of our networks.

â€‌ Permission to set up the CNG stations in Faridabad is taking time but Adani hopes to start work on four stations by the end of April.