Reliance predicts surge in gas supply to CGD sector

Vol 11, PW 9 (06 Sep 07) Midstream & Downstream

Gas availability for CNG, households, commercial and industrial establishments will surge in the next five years, according to Reliance Industries.

In a keynote speech to the â€ک2nd Annual CitiGas India Conference’ in Delhi on September 5th, RP Sharma, president of Reliance’s LNG business, said India’s power sector is turning its back on gas-fired generation, leaving 38m cm/d without a home. Sharma quoted conflicting gas-demand projections for the power sector by the oil and power ministries to back his argument.

In the five years to 2012 the oil ministry predicts the power sector will need 127m cm/d, but the power ministry predicts it will need only 89m cm/d – leaving 38m cm/d looking for a home. “The power ministry is not visualising any new power stations coming up on gas (between 2007 and 2012) due to uncertainty of availability and price,â€‌ said Sharma.

“Presently the power sector has an allocation of 80m cm/d and the additional 9m cm/d is for power stations under construction.â€‌ For Reliance the question is simple: where will the 38m cm/d flow Answer: into CGD networks.

Sharma argues three critical drivers will ensure that any surplus gas will flow into CNG, piped gas for households and gas for restaurants, hotels and factories: Driver 1: Government-backed Integrated Energy Policy for clean cooking energy across India within 10 years Driver 2: Oil ministry target to connect 20m households with gas over the next five years Driver 3: Supportive judiciary enforcing use of CNG by automobiles Sharma also predicts an end to gas shortages. By the end of this year, he said, Reliance will commission its East-West Pipeline carrying D6 gas, part of Reliance’s plan to lay 4500-km gas pipelines across India.

Add to this pipelines planned by GAIL and Gujarat State Petronet, adds Sharma, and you have the beginning of a national gas grid. “The restriction on gas availability due to inadequate infrastructure,â€‌ he said, “will be overcome in the next three to four years.