GAIL angry at oil ministry D6 interference

Vol 13, PW 16 (28 Jan 10) Midstream & Downstream

GAIL is angry at the oil ministry for meddling in its commercial arrangements with Reliance for evacuation of D6 gas.

“Reliance is putting pressure on us through the ministry to evacuate as much D6 gas as fast as possible,â€‌ complains GAIL. Tempers flared last month during a meeting convened by the oil ministry when a top GAIL executive lost his cool saying it is not GAIL’s responsibility to ensure D6 gas sales.

GAIL, he said, earns no marketing margins on D6 gas transported through its pipelines. Not surprisingly, the ministry didn’t react well to this outburst and despatched a letter demanding GAIL make a presentation about its gas transmission capability.

“Two presentations have already been made,â€‌ we learn, “and a third one is scheduled.â€‌ Oil ministry joint secretary marketing Apurva Chandra is "personally monitoring" the entire D6 gas evacuation exercise, we hear.

“He wants to know the carrying capacity and â€کthroughput’ of each GAIL pipeline,â€‌ we are told. “He wants to check that bottlenecks are being removed and that D6 gas has actually started reaching customers.

It seems as if the entire oil ministry marketing division is now working for Reliance!â€‌ What particularly irks GAIL, we are told, is that the ministry does not show the same interest in helping it resolve several outstanding disputes with Reliance. “GAIL supplies gas to Reliance’s Gandhar petrochemical complex in Gujarat,â€‌ adds a source.

“But Reliance has not signed any contracts for that gas for the last two years under one pretext or another!â€‌ He adds GAIL has sought ministry intervention on several occasions to get these contracts signed. But the ministry’s standard response is GAIL should sort out commercial matters directly with Reliance.

“By the same yardstick,â€‌ we are told, “the ministry should not get involved in D6 gas evacuation! It should let us sort out this commercial matter on our own.â€‌