Andhra Pradesh begins work to set up state gas grid

Vol 11, PW 13 (01 Nov 07) Midstream & Downstream

Moves continue to set up a gas transmission and distribution network across Andhra Pradesh to replicate similar infrastructure in Gujarat.

PETROWATCH learns Andhra Pradesh state government sponsored Krishna Godavari Gas Network Ltd, where Gujarat government-owned GSPC holds 26%, has begun preliminary work to set up a gas grid and City Gas Distribution network. Helping KGNL is Mumbai-based IMRB International, a market research company established in 1971, which has been commissioned to carry out local gas demand surveys.

Last year Ernst & Young carried out a broad demand survey for KGNL. But KGNL now wants more detailed surveys so it can design pipeline networks.

“IMRB’s survey will tell us the (demand) loads in each town or pocket of a large city,â€‌ KGNL tells us. “This will help us optimise the size of the pipes to be used.

â€‌ IMRB is first carrying out surveys in the towns of Kakinada, Vizag and Rajahmundry, where it is gathering data on future potential CNG and domestic piped natural gas consumers. “Data is coming in piecemeal but by early November we should have a consolidated report on each of these towns.

â€‌ When it completes surveys of the three towns, KGNL plans to ask IMRB to survey another 20 towns where it wants to sell gas, focusing initially on towns in coastal areas. But uncertainty over future central government policy on â€کgas utilisation’ means that KGNL has asked IMRB not to survey potential industrial and commercial users of natural gas.

“We are not sure what kind of â€کgas utilisation policy’ the oil ministry will announce,â€‌ we hear. “Only after that policy is announced will we survey commercial and industrial consumers.

â€‌ KGNL is also carrying out network designing and route surveys for its proposed CGD network. Yet before it begins physical construction, the company must first secure official sanction for its plans from Delhi, where it has applied for permission.

“Our application has been sent by the (oil) ministry to the regulator,â€‌ adds a company source. “But we have no official communication about this either from the regulator or from the ministry.

â€‌ KGNL is also waiting for the regulator to spell out how proposed CGD networks will be granted permission. “We want to see if the CGD networks will have to be town-based, zone-based (group of towns) or based on demand pockets in large cities.