Clamour for D6 gas as GAIL launches Dewas CGD

Vol 13, PW 13 (03 Dec 09) Midstream & Downstream

GAIL subsidiary GAIL Gas has asked the oil ministry to earmark D6 gas supplies for its first retail gas network, which is about to be launched in Dewas in Madhya Pradesh.

PETROWATCH learns that the small town of Dewas, the former seat of a kingdom that ruled central India, would need 40,000 cm/d D6 gas in the first year. After the first year, according to GAIL Gas, Dewas would need an additional 10,000 to 15,000 cm/d of D6 gas annually to meet rising CNG and piped gas demand.

GAIL Gas is confident it can secure D6 supplies for Dewas within the next month. According to a company source, when the government â€کallocated’ 40m cm/d gas last year in the first D6 carve-up, 5m cm/d was earmarked for city gas projects.

Out of this only 2m cm/d has been given to retail gas operators. “D6 gas for Dewas could come from the unused 3m cm/d,â€‌ says our source.

He adds that the government has also earmarked an additional 2m cm/d of D6 gas for retail operators from October 27 this year. GAIL Gas signed its first set of 15-year contracts with industrial piped gas consumers in Dewas on November 24.

Pharmaceutical manufacturer Ranbaxy will receive 5000 cm/d initially, rising to 15,000 cm/d, we learn. Decorative lamp manufacturer Kuber on the other hand will receive just 200 cm/d - all it needs.

“We have already laid pipelines to both these customers,â€‌ says GAIL Gas. “Supplies should start within a week.

â€‌ But until it actually receives D6 gas, GAIL Gas will supply more expensive R-LNG from Dahej to these and other customers in Dewas. GAIL Gas also won licences for Sonepat in Haryana, Kota in Rajasthan and Meerut in Uttar Pradesh in India’s first auction of retail gas permits earlier this year.