Mathura waits for Saumya DSM to get its act together

Vol 13, PW 6 (27 Aug 09) Midstream & Downstream
     

Three months have passed since little-known Saumya DSM Infratech won a licence to set up a piped gas and CNG network in Mathura.

But the cash-strapped company is yet to secure a firm gas commitment from a supplier – putting it on a collision course with the regulator. According to the rules, a company that wins a gas retail licence must show proof of firm gas supply within 90 days of â€کauthorisation’.

Incorporated just last year, Saumya was granted â€کauthorisation’ on May 12 this year. Mathura - famous for Indian Oil’s 7.5m t/y refinery and as the birthplace of Hindu deity Lord Krishna - figured among six cities auctioned in March during the first bidding round.

A joint venture between Kolkata-based Saumya Mining and Uttar Pradesh-based developer DSM Infratech, Saumya won Mathura against sole competitor GAIL Gas. Shortly after the award in May, GAIL Gas challenged the award at the Appellate Tribunal (APTEL), but lost.

Saumya tells PETROWATCH it is trying to arrange money for its network and hopes for good news within a week. “We are arranging funds from five or six banks,â€‌ says a source.

Two weeks ago, Saumya even approached the Oil Industry Development Board to arrange a Rs200cr ($45m) loan, but was rejected. “How did this company win a licence without moneyâ€‌ questions a source.

Saumya claims it is in “active’ discussionsâ€‌ with Mukesh Ambani-controlled Reliance to buy D6 gas. “We have prepared a draft agreement,â€‌ adds another company source.

“It will be signed soon.â€‌ Really On May 15, Saumya was absent from a list of seven firms â€کallocated’ 834,000 cm/d of D6 gas by the government.

Contacted by this report, the PNGRB defends the award of Mathura to Saumya, with the astonishing admission that it does not check if a company actually has the gas it claims in its bid! Asked whether Saumya is financially viable company, a PNGRB source adds: “It is verified by a consultant, I cannot comment further.â€‌