East coast gas only hope for Gujarat's industrial users

Vol 12, PW 20 (12 Mar 09) Midstream & Downstream

Gujarat Gas is telling textile mills and chemical plants in Surat, Ankleshwar and Bharuch to respect the new RSL limits until gas supplies from D6 become a reality.

“Demand for natural gas remains strong in the company’s markets,â€‌ Gujarat Gas managing director Shaleen Sharma told investors during a results presentation on February 26. “We hope to tie up Indian east coast gas to sustain and grow our retail markets.

â€‌ But until that happens, Gujarat Gas has issued industrial users drawing more than 66% of their DCQ with a stern warning. In its March 6 letter to customers, the company warns: “If at any time the pipeline hydraulics do not permit overdraw of gas beyond the RSL, we will tell our customers and if anyone is found consuming gas more than the RSL on any particular day after such intimation, which may be verbal, via SMS or in writing, the supply of gas to the respective unit may be suspended immediately in accordance with the terms and conditions of the GSA.

â€‌ Health and safety is the key driver behind the Gujarat Gas warning. “Several customers continue to draw more gas than is available despite repeated interventions by us,â€‌ confides a Gujarat Gas source.

“This can lead to critical and dangerous safety issues with pipeline hydraulics in the gas pipeline network. The RSL provision has been brought in to overcome this problem.

â€‌ Gujarat Gas insists that life under the RSL regime has some flexibility, as usage will be monitored daily. But calculation of gas volumes for billing, it adds, will remain monthly.

Still, customers are angry that Gujarat Gas is rushing to modify its GSAs by adding a minimum â€کguarantee offtake provision’ effective February 1, to legally bind users to the new supply amounts. But an industrialist tells us Gujarat Gas has grudgingly agreed to a 90% â€کminimum guarantee offtake’ agreement from an earlier 80%.

“Gujarat Gas wanted 100%,â€‌ he says. “But we bargained and got 90%.


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