Lucky Indraprastha Gas gets more gas from GAIL

Vol 9, PW 7 (14 Jul 05) Midstream & Downstream

Delhi city gas distribution company Indraprastha Gas is set to enjoy a marginal increase in supplies of ONGC gas from GAIL through the HBJ.

The increase will come into effect this fiscal year. With supplies of ONGC natural gas depleting, GAIL must exercise a fine balancing act between gas-hungry customers.

It must also contend with Supreme Court guidelines that insist the urban transport sector gets first priority for subsidised domestic natural gas over other customers to reduce air pollution levels. In India, the governments Gas Linkage Committee allocates subsidised domestic natural gas but allocations outstrip actual supplies because demand far outstrips supply.

With Indraprastha Gas, actual allocation is 2m cm/d but GAIL supplies it just 1.1m cm/d. In 2004-05, Indraprastha Gas took an average 1.25m cm/d.

Under the present billing mechanism for subsidised ONGC gas ex-HBJ, any gas that customers take beyond their allocation by the Gas Linkage Committee is charged at 120% of the price of regassified LNG. Indraprastha Gas receives special treatment as it is in what GAIL describes as its Priority Customer category in line with the Supreme Court guidelines.

GAIL has now decided to supply Indraprastha Gas with 1.5m cm/d to reflect its future CNG and piped natural gas expansion plans. Today, the HBJ carries 29m cm/d domestic natural gas.

This is supplied to three categories of customers. First and most important are those that receive the amount they require, with no threat of cuts in supply.

The second category is lower in priority and faces a 30% cut in its allocated quantity. The third category is lowest in priority and suffers a 55% cut in its allocated supply.

Supplies of subsidised gas to second and third category customers will further reduce this year. Read on.