Noida battleground in CGD war between IGL and Adani

Vol 13, PW 4 (30 Jul 09) Midstream & Downstream

Noida in Uttar Pradesh is best known alongside Gurgaon in Harayana as one of the fastest growing satellite towns outside Delhi.

But with gas demand booming, Noida has also become the battleground in a furious turf war between gas retailers Delhi-based Indraprastha Gas and Gujarat-based Adani Energy. Not surprisingly, it has also become a critical test case for the Petroleum & Natural Gas Regulatory Board, as it tries to mediate between the two warring parties.

On July 14, Adani and IGL representatives met on neutral territory in the Board’s office in central Delhi before member technical BS Negi and secretary RP Watal to justify their respective cases for control of Noida. Adani blamed GAIL for its inability to begin operations despite investing close to Rs100cr in two CNG stations ready to be commissioned and despite laying the promised 35-km steel pipeline plus 50-km of plastic pipelines.

“GAIL is a promoter of IGL and has interests in the company,â€‌ alleges a source. “That is why it is denying connectivity from its pipeline to Adani and instead gave it to IGL.

â€‌ Adani would be the first to admit that the gas distribution NoC it received from Uttar Pradesh state authorities in November 2005 was revoked in June last year because it failed to meet the licence conditions. But Adani argues the Board should not forget that by October 1, 2007 when the gas regulator officially began functioning it had completed more than 25% of its minimum work requirement, as laid down by the rules.

Despite this, some wonder why Adani is bothering to still fight for Noida. “How can Adani set up a network in Noidaâ€‌ we hear.

“It doesn’t have gas, nor does it have a City Gate Station, which is at the heart of a retail gas network.â€‌ By contrast no one can dispute IGL is well established, selling 100,000-kg/day of CNG to 40,000 vehicles from eight CNG stations and piping gas to 1000 homes in Noida.