GAIL targets to supply gas to all industries in 6 months


 Natural gas supply through the newly commissioned pipeline to industries in Goa, at least within clusters, is likely to be a reality in the next five to six months, according to senior officials of Gas Authority of India (GAIL), who stated that it can be done in a relatively shorter time frame.
The officials said that “the laying of the 175 km pipeline from Gokak to  state took over two years, and the commissioning was done in February 16 after transmission commenced to Zuari.”
“However creating a smaller network grid would not take long as the construction agencies are in place and are geared up for it,” they added.
Under phase II development, currently under implementation, plans are afoot to initially supply gas to industries in Verna-Kundaim and Bardez belt followed by final plans to cover all industries in most of the industrial estates.
GAIL officials were in Panaji recently to meet with the potential customers in order to come up with a commercial agreements with them and speed up the construction process.
Mr Rajiv Mathur, executive director, marketing, GAIL, New Delhi, said that gas could be supplied to all kinds of users, large and small, not only to industrial segment but also to commercial, transport and domestic segments.
Past experience showed that industries that switched over to gas rarely went back to other fuel stocks, Mr Mathur said adding that he was confident of a similar development taking place in Goa.
Officials of major companies such as Sesa Goa, Syngenta, United Brewries, Zuari, Hindustan Lever along with officials of several pharmaceutical companies were present during the customer interaction and looked keen to enter into supply agreement with the GAIL.  Issues relating to pricing and uninterrupted supply were raised by the officials of the companies along with other worries like government support and permissions to be taken before applying for gas.  Most industries in Goa are currently fueled on furnace oil and feel that gas is a cheaper option.
GAIL officials pointed out that gas prices could be at spot rates or through long term contracts and companies usually could go in for supply agreements ranging from three to 20 years depending upon the requirement.
As for prices there is always a variable component built in it as natural gas is imported by the transmission agency due to shortage in production in India. As such prices are cheapest when under Administered Price Mechanism (APM) at US $ 5.2 per MMBTU and at long term contract the rate is US $ 12- 15 per MMBTU.
Mr R C Arora, zonal manager, Mumbai, pointed out that no special permission from the local government is necessary before going in for gas apart from the requisite approval from the factory inspectorate, fire department etc.
Meanwhile, a Sesa Goa manager present at the meet said that “the company is keen to tap the pipeline as an alternate fuel for its 60 mW power plant. The plant at present sells power to the state grid and is fired on byproduct from the pig iron plant. But, having supply of gas would mean stepping up production in times of power shortages in the state.”   [NT]