HPCL waits on GAIL

Vol 14, PW 8 (07 Oct 10) News in Brief

But for GAIL bureaucracy, Hindustan Petroleum’s 6.5m t/y refinery in Mumbai would be receiving D6 gas by now.

HPCL has already signed a supply contract with Reliance for 200,000 cm/d of D6 gas allocated last year and a transmission contract with Reliance Gas Transmission Infrastructure to bring the gas to Gujarat where the East-West pipeline ends. But slow-moving GAIL hasn’t yet signed a transmission agreement to ship the gas the final distance from Gujarat to Mumbai.

HPCL hopes GAIL will finally sign this month so the Mumbai refinery can get D6 gas at around $6/mmbtu until 2014. “There’s little price difference for us between D6 gas and R-LNG,” says HPCL.

But it still prefers D6 gas, as the price will stay stable till 2014 while R-LNG prices fluctuate every month. Since September 2009, the Mumbai refinery has been receiving 800,000 cm/d of Dahej R-LNG from GAIL at around $7.5/mmbtu.

HPCL uses this gas in its refinery to replace liquid fuels like naphtha, ‘LSHS’ and fuel oil.