HPCL waits for regulator before laying gas pipeline

Vol 11, PW 10 (20 Sep 07) Midstream & Downstream

Gujarat authorities appear to have got the message that from now on it is the new gas and downstream regulator in Delhi who is responsible for granting permission to companies that want to lay gas distribution pipelines, even small ones linking CNG stations.

Take the case of Mumbai-based refiner Hindustan Petroleum, which operates 10 CNG stations in Ahmedabad but wants to open six more. PETROWATCH learns HPCL wrote to state authorities three months ago asking for permission to lay a small pipeline connecting four of its nine â€کdaughter’ CNG station to its sole â€کmother’ CNG station but was told it should turn to Delhi for permission.

“They told us to wait until the regulator had issued guidelines for the setting up of CGD networks,â€‌ says HPCL. “We have not yet written to the regulator and will wait until he is fully operational.

â€‌ For now, HPCL delivers CNG to its stations in â€کcascades’, delivered by trucks. As with other CGD companies across India, HPCL’s plans to expand its network of CNG stations, located alongside its existing petrol and diesel pumps, is hampered by acute shortages of gas.

HPCL has a contract to draw 30,000 cm/d from GSPC but is presently drawing around 32,000 cm/d. Talks are on with GSPC for an additional 25,000 cm/d to supply the six new CNG stations it is planning to set up.

“Nothing has been finalised yet,â€‌ says a company source. “Gas sourcing is a big challenge.

Everybody has tied up whatever gas is available in the market.â€‌ HPCL sells close to 6000-kg CNG per day at Rs25.50 per kg but believes it could sell much more if there was more gas available.

Plans by HPCL to begin supplying piped natural gas to households and commercial establishments in Ahmedabad are also in limbo until the new regulatory board becomes fully operational. Two years ago Gujarat state authorities issued HPCL a licence to sell CNG and set up 10 CNG stations.

Ahmedabad has 55 CNG stations in total, of which Adani Energy operates 45.