Mumbai glass manufacturer looking forward to D6 gas

Vol 12, PW 5 (24 Jul 08) Midstream & Downstream

Mumbai-based Vitrum Glass - the city's second biggest industrial user of gas after Godrej Industries - is clamouring for D6 gas from Reliance, despite the ongoing court battle for ownership between brothers Mukesh and Anil Ambani.

Vitrum produces more than 1.1m amber-coloured glass bottles daily for drug companies and depends heavily on regular supplies from Mahanagar Gas (MGL) to maintain steady production. A company source confides that Vitrum needs D6 gas quickly to bridge a growing gap between contracted quantities of natural gas from MGL and what it actually receives - a concern faced by many large industrial firms in Mumbai.

Look at the numbers to see why. From 1999 to 2006, Vitrum received 20,000 cm/d - exactly the amount it had contracted to buy.

But in November 2006, gas supplies were slashed by 45% to about 11,000 cm/d. "This was because large units (around Mumbai) like Tata Power, Ispat, Rashtriya Chemicals and Fertilisers whose supplies had been slashed by 45% demanded that all industries in and around Mumbai face the same cuts as they do," we hear.

Will D6 gas fill the shortfall Vitrum tells us Reliance has promised 6m cm/d from D6 to GAIL of which 1m cm/d will be diverted to MGL - its Mumbai-based JV with British Gas. "MGL says it is constructing a gas receiving station at Mahape on the outskirts of Mumbai which will receive D6 gas from GAIL," says Vitrum.

But until D6 gas arrives, Vitrum will have to use costlier and dirtier furnace oil. Vitrum pays Rs10.82 per cubic metre for domestic gas but Rs25 per cubic metre for the equivalent calorific value furnace oil.

"Furnace oil has higher sulphur content than natural gas," complains Vitrum. "This gives our bottles a darker tinge.

If we keep changing the fuel mix we can't control the colour of the bottles. A consistent fuel mix is important to ensure uniform colour."