Kota growth focus for GAIL Gas in Rajasthan

Vol 14, PW 24 (02 Jun 11) Midstream & Downstream

GAIL Gas expects to sell 60,000 cm/d of R-LNG by March 2012 in the Rajasthan city of Kota, formerly the seat of a princely state but better known today for private ‘coaching’ institutes where students from across India prepare to take university entrance tests for engineering and medical colleges.

PETROWATCH learns the GAIL retail subsidiary is currently selling 10,000 cm/d in Kota to four small factories, among them food processing factory Kota Dal Mills and pigment manufacturer Vithal Pigments. GAIL Gas began selling gas in Kota only this January (2011) and expects sales to soar.

Within the next two weeks, it plans to begin selling CNG to cars and buses in Kota from a CNG dispenser installed at a Hindustan Petroleum petrol station. By the middle of July, it will open its own ‘stand-alone’ CNG station in Kota, a small city of just 1m inhabitants.

GAIL does not expect huge gas sale volumes and expects to be selling 60,000 cm/d at most by the end of this fiscal. “All this gas will be (expensive) R-LNG,” explains a company source.

“We don’t yet have a (cheaper) domestic gas allocation from the (oil) ministry.” A vibrant industrial hub, Kota is on the eastern bank of the Chambal River and home to small and medium-sized chemical factories, pigment and paint manufacturers in addition to large-sized fertiliser factories and power stations as well as handicrafts manufacturing units.

In five years the company reckons it could be selling as much as 200,000 cm/d in Kota: about 40% as CNG for cars and buses; another 40% to small and medium-sized factories and businesses who want to replace fuel oil, naphtha or LPG; and the remaining 20% to households as cooking fuel.