Adani wants more D6 gas for Ahmedabad

Vol 14, PW 6 (09 Sep 10) Midstream & Downstream

Adani Energy is defending its oil ministry D6 gas allocation from criticism by disgruntled power and fertiliser sector companies.

On January 19 this year (2010), the oil ministry allocated 200,000 cm/d of D6 gas to Adani for Ahmedabad. When contacted, an Adani source tells PETROWATCH his company actually needs double or approximately 400,000 cm/d for its growing retail business in the city.

Adani currently sells 850,000 cm/d in Ahmedabad of which 48% is sold as CNG, 47% goes to factories and the rest goes to households and commercial establishments like restaurants and hotels. Adani says it has invested Rs650cr ($139.4m) in its Ahmedabad city gas network, consisting of 200-km of steel pipeline, 2000-km of plastic pipeline and 48 new CNG stations and plans to add another five CNG stations by March next year (2011), taking the total to 53.

Our company source stresses Adani is Ahmedabad’s dominant city gas player and should have begun receiving D6 gas long ago. “Reliance is not signing a contract with us,” he complains.

“They just don’t respond.” State-owned Hindustan Petroleum, he adds, has a relatively small retail gas presence in Ahmedabad but receives D6 gas.

He believes HPCL must have invested Rs50cr ($11m) at most to lay 10-km steel pipeline and set up CNG pumps at 14 of its company-owned petrol stations from which it sells 40,000 kg/d of CNG. Adani by contrast sells 300,000 kg/d from 48 new ‘stand-alone’ CNG stations.

“But we still don’t receive D6 gas!” Adani wants D6 gas supplies to insulate it from volatile R-LNG prices. “Spot LNG prices change every 15 days,” we are told.

“It isn’t easy to explain this to auto-rickshaw and taxi drivers. But the D6 price is stable.