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'Time to have a gas pricing policy to stabilise prices at consumer level'

Natural gas is considered India’s fuel for future growth. The country managed to double gas output with the commissioning of Reliance Industries’ KG basin gas fields.

, ET Bureau|
Mar 22, 2010, 03.11 AM IST
Natural gas is considered India’s fuel for future growth. The country managed to double gas output with the commissioning of Reliance Industries’ KG basin gas fields. Gail India manages most of the gas pipeline network that crisscross the country. BC Tripathi, chairman and managing director of the state-run gas utility talks about its plans to meet the growing demand for natural gas in the country in an exclusive interaction with ET. Excerpts:

A high-level delegation from Qatar is visiting India. Qatar is one of the largest liquefied natural gas (LNG) suppliers. Can we expect an announcement?

There are some talks with them. Qatar is one of the important energy suppliers for India. The country’s deputy premier and minister of energy & industry, Abdullah Al-Attiyah, is here. He is meeting top government officials and will also attend the inaugural session of the 6th Asia Gas Partnership Summit on Monday. Both Gail and Petronet LNG are holding discussions on various possibilities, but I am not in a position to tell anything at this moment.

There was a plan to bifurcate Gail India into two firms — a gas transportation company and a gas marketing company? Is there any development in this direction?

There was a plan to unbundle company’s transportation and marketing businesses to maintain a distance between the two activities. For this purpose, we have already separated the accounts. Gail Gas Ltd is created to focus exclusively on city gas distribution business.

It is a wholly-owned subsidiary of Gail India and has its own board. We are approaching DPE (The department of public enterprise) for separate listing of Gail Gas. It is likely to happen in the next five-six months.

Gail Gas Ltd was created to undertake marketing activities. Is it undertaking any project?

GGL is handing four city gas projects in the first round. Meerut, Dewas, Sonipat and Kota. In Dewas, the company has already started supplying both CNG (compressed natural gas) and PNG (piped natural gas). In other cities CNG sup ply will start in a phased manner by May-June and PNG supply will start from June.

Though Gail Gas had tied-up with Reliance Industries (RIL). Yet it is so far going solo on city gas projects. Why? Is the understanding still valid?

We are willing to join hands with anybody who can add value. We had signed a memorandum of understanding with RIL for undertaking city gas projects together. Projects couldn’t take off due to some regulatory hassles. But the MoU still stands and we will undertake joint projects in future.

Gail is already into power generation with NTPC. Is it planning to diversify into power generation?

Gail’s core business is gas transportation and marketing. But power generation is part of our diversification strategy. We don’t want to undertake mega power projects. We will concentrate on small distributive power projects along with our pipeline networks.

Commercial power generation is a part of the company’s business diversification strategy and the R&D (research and development) team of the company has been evaluating various power projects across the country. We also plan to double the generation capacity Dabhol Power project Ratnagiri Dabhol power project. Studies are on by consultants for the same.

Keeping in view the prime minister’s Solar Mission, Gail is also focusing on various non-conventional energy sources. Gail has recently started a pilot wind power plant at Sinoi in Kutch of 4.5 mw capacity which will be on stream from April 2010. It has three wind turbine generators of 1.5 mw each.

The company also has some plans for setting up solar power plants.

The government is toying with the idea to have a uniform gas pricing regime and given the task to study its feasibility to Gail? Is it possible to have a uniform gas pricing system?

We have appointed a consultant to examine the feasibility. The first draft has come to us. Discussions are going on with stakeholders. The final report will take some time. We should wait for the report. But, it is a fact that currently, natural gas prices varies from $2 per million British thermal unit (mBtu) to $7 per mBtu. Besides, there are spot prices. This is the time to have a gas pricing policy to bring price stability at consumer level.
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