GSPC Gas cuts industrial gas price in Gujarat

GSPC Gas, the city gas distribution (CGD) arm of state-owned GSPC, effected a minor reduction in industrial gas prices on Saturday. However, the prices of domestic piped natural gas (PNG) and compressed natural gas (CNG) have not been reduced.
Officials said that the price of industrial gas has been reduced from Rs30.70 per standard cubic metre (scm) to Rs29.70 per scm with effect from Sunday.
“The decision to cut the gas price will benefit about 1,600 industrial consumers of GSPC Gas across the state,” said an official.
The decision comes on the day of the DNA report which said that state government has unofficially asked CGD companies operating in the state to refrain from hiking CNG and domestic PNG prices till the assembly elections.
A GSPC Gas official attributed the reduction in industrial gas prices to the cooling of natural gas prices in the international markets in past couple of months. Spot LNG prices, which were quoting at around $18-19 per Million Metric British Thermal Units (MMBTU) a few weeks ago, are now in the region of $15 per MMBTU, which has provided some cushion to the CGD and enabled the price cut.
The official, who was speaking on condition of anonymity, did not offer any comment when asked if there was a possibility of cut in prices of CNG and domestic PNG. However, industry experts say that there may be slight reduction in CNG and domestic PNG prices if natural gas prices decline further. The state government levies 15% VAT on natural gas.

PNGRB slashes Gujarat State Petronet's gas grid tariff by 40%

India's downstream oil regulator Petroleum and Natural Gas Regulatory Board has cut the tariff charged by the Gujarat State Petronet Ltd for its 2,239 kilometer Gujarat gas grid by about 40%, after discrepancy was found in tariffs from different customers.
“Based on the details submitted by GSPL on the tariff during the pre-regulatory regime, it was found that currently GSPL is charging discriminatory tariffs from different customers which range from Rs 2.54 per mmBtu (million British thermal unit) to Rs 43.93 per mmBtu on GCV (Gross Calorific Value) basis,” PNGRB said in its order on Tuesday.
The regulator said that it has fixed the rate at Rs 23.9 per mmBtu, with effect from November 2008, against Rs 39.6 per mmBtu submitted by the company, the order said.
“In addition to the tariff, GSPL is also recovering system use gas including unaccounted gas from their customers in kind,” PNGRB said in the order.
The regulator has also asked the company to return the cost of entire system use gas, including unaccounted gas to the shippers/consumers from November 20, 2008 onwards and also cancel separate recovery either in cash or in kind with immediate effect.
PNGRB said that the difference between the tariff charged by the company and that approved by the regulator will be adjusted with customers in future billings.
Earlier in June, PNGRB agreed to give authorization to GSPL’s 2,239 km of Gujarat gas grid with a capacity to carry 30.46 million standard cubic meters of gas per day.

Separate transportation, marketing: oil regulator to gas firms

Oil regulator PNGRB wants gas utilities like GAIL India Ltd to separate their gas transportation and marketing businesses so that ownership of a pipeline does not provide any firm with an unfair advantage while selling the fuel.
The Petroleum and Natural Gas Regulatory Board (PNGRB) floated a concept paper on unbundling of activities of transportation and marketing of natural gas and has invited comments from industry by 15 October.
“The purpose of this policy is to ensure that pipeline ownership does not provide any competitive advantage to any gas seller and abuse of market power while establishing an efficient gas grid with open access for all the players on a non discriminatory basis,” the paper said.
PNGRB said monopoly behaviour is anti-competitive and, therefore, not in consumer interest.
“In case of a monopoly which provides a variety of services, splitting it vertically along the gas value chain is the end towards which all regulators in developed gas markets have endeavoured and also reached. Simply put, what is meant here is that where monopoly and non-monopoly services are
offered, splitting them into two parts is the objective of regulators in different parts of the world,” it said.
Detailing a roadmap, the regulator said accounts of pipeline transportation and gas marketing should first be segregated. This should be followed by creation of separate “identifiable legal entities along functional lines i.e., production, transportation, marketing of natural gas etc.”
Finally, the ownership and management control of these separate entities should be segregated.
“This structure envisages that the entity and its affiliates do not have common ownership as visualised under the proviso to section 21 of the PNGRB Act, 2006. Management control segregation would ensure that independent decision making processes exist in the entity and its affiliates,” the concept paper said.
It said accounts should be separated by 2013-14 while legal unbundling of the transportation segments of natural gas transmission entities should be completed by 2015-16.
Subsequently, Board would consider declaring a time-line for ownership/management control unbundling, it said.
The regulator said the PNGRB Act provides for separating “the activities of marketing of natural gas and the transportation including ownership of the pipeline within such period as may be allowed by the Board and only within the said period, such entity shall have right of first use”.
It said any firm applying to building and operating a gas pipeline would have to give an undertaking on its business interests in related areas of gas marketing or city or local gas distribution network.

PNGRB cuts GSPL rate for Gas Grid by 40%

PNGRB also directed GSPL to return the cost of entire system use gas including unaccounted gas to the shippers/consumers from November 20, 2008 onwards

The Petroleum and Natural Gas Regulatory Board (PNGRB) has slashed the rate charged by Gujarat State Petronet Ltd (GSPL) for its 2,239-km Gujarat Gas Grid by about 40 per cent, saying the company was charging “discriminatory” rate from different customers.
Against Rs 39.6 per million British thermal unit (mmBtu) rate submitted by GSPL, the PNGRB in its 30-page order fixed the rate at Rs 23.9 per mmBtu.

The approved rate would be effective November 20, 2008, PNGRB said, adding the difference between the tariff charged and that approved by the board shall be adjusted with customers in future billings.
PNGRB also directed GSPL to return the cost of entire system use gas (SUG), including unaccounted gas to the shippers/consumers from November 20, 2008 onwards and withdraw separate recovery either in cash or in kind with immediate effect.
The board had in June decided to grant authorisation to GSPL’s 2,239 km of Gujarat Gas Grid with a capacity to carry 30.46 million standard cubic meters of gas daily.
“Consequently, board has recognised only 2,239 km’s of high pressure Gujarat Gas Grid of GSPL as against 2,890.13 km of network configuration submitted by them in their tariff filings,” it said.
“Based on the details submitted by GSPL on the tariff during the pre-regulatory regime, it was found that currently GSPL is charging discriminatory tariffs from different customers which range from Rs 2.54 per mmBtu to Rs 43.93 per mmBtu on GCV basis.
“In addition to the tariff, GSPL is also recovering system use gas including unaccounted gas from their customers in kind,” the order said.

GAIL moves SC against PNGRB's decision to allow GSPL led consortium in pipeline tender

GAIL India has moved the Supreme Court against the decision of PNGRB to allow the Gujarat State Petronet (GSPL) led consortium to bid for Rs 5,000 crore Mallavaram-Bhopal-Bhilwara-Vijaipur gas pipeline project. GSPL led consortium has emerged as the lowest bidder for the project, ousting GAIL India.

The state-run gas utility has alleged that PNGRB accepted the technical bids of the consortium despite the bid not being in conformity with the tender conditions. The company argued that the board could not revise the tender, after bids were submitted by the aspirants, under the guise of introducing post-bid clarifications.

"The tender floated was a zero deviation tender and no condition in variance of the terms of the tender could be added any by any bidders. Therefore, the tribunal erred in upholding the decision of the board of accepting the technical bid of the consortium despite material deviation from tender terms," said GAIL in its petition.

Adani Gas questions Ahmedabad Municipal Corporation tax on pipeline

The Gujarat high court on Friday issued a notice to the Ahmedabad Municipal Corporation and the state's advocate general after Adani Gas Ltd questioned the levy of property tax on its pipelines meant for gas distribution in the city.
According to case details, the civic body raised a bill of Rs 5.53 crore towards property tax on its gas pipelines laid underground across the city. The tax has been calculated from 2005.

The company paid the amount in March this year, but questioned the validity of the levy. When things could not be solved, the company moved the high court challenging the legality of such taxation. Before the court, the company has contended that the pipelines have been laid underground and serve the public. On a property that is not in the form of a building or construction above the ground or on land, property tax cannot be levied, the company's counsel submitted.
Besides, the company also questioned the provisions under which the AMC levied property tax - section 141(B) of the Bombay Provincial Municipal Corporation (BPMC) Act. It was submitted that the provision speaks of levying tax on buildings in the corporation area, but is silent on the limit on land tax. And this is ultra vires to Article 243 of the Constitution.
After the hearing, a bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala sought an explanation in this regard from AMC as well as from the state's highest legal officer. Further hearing has been scheduled three weeks later.

Poor to get LPG cylinders

Aiming to make the city pollution free, the government on Tuesday launched its ambitious ‘kerosene free Dilli’ scheme that will provide LPG gas cylinders and gas stoves to over 3.5 lakh poor people who have Antyodaya Anna Yojana, below poverty line and jhuggi ration cards.

It will provide relief to those who find it difficult to procure kerosene oil for cooking.
Chief minister Sheila Dikshit inaugurated the scheme by handing over gas connection papers and burners to 20 beneficiaries at a function organised at Delhi secretariat. A total of 200 gas connections were distributed on Tuesday.

The CM said all beneficiaries will get their LPG connections and filled-up gas cylinders by December.

Dikshit added that it is an unique effort by the government which will go a long way in overcoming the siphoning of kerosene under public distribution system by some dealers. It will also check the black marketing of kerosene, she added.

“We had been receiving complaints that people were not getting their prescribed quota of kerosene from the dealer. As a result, they had to buy it from the open market
at exorbitant rate,” said Dikshit.

“Cooking on a kerosene stoves was also affecting the eyes and lungs of women. Our kerosene-free scheme will overcome all difficulties and ensure a clean environment for women working in the kitchen,” Dikshit added.

The CM said the total cost of the programme is Rs 108.66 crore, of which Rs 22.75 crore is to be borne by the union government and Rs 85.91 crore by the city government.

Under the scheme, the city government is presenting a filled-up LPG cylinder, regulator, gas stove, suraksha tube and  LPG connection papers to the senior most female member of the family, having a BPL card.
Dikshit said the city government will spend Rs 3,049 per beneficiary. The beneficiaries were advised to make rational use of cooking gas and to get their cylinder filled by themselves.

Kerosene oil users having a ration card receive 12.5 litre oil every month at Rs 14.83 per litre. Food and supplies minister Haroon Yusuf told them to contact the nearest office of the food department to procure LPG connections.

Chief secretary P K Tripathi said the city government has meticulously planned the scheme and has ensured an effective implementation through proper coordination with all stake holders.

Natural gas prices dip up to 20 per cent on supply glut

Natural gas prices have dropped by up to 20 per cent in the spot market, bringing relief to Indian refiners, power and fertiliser producers, which are now dependent on imports for most of their requirement.
Industry experts say prices of liquefied natural gas (LNG) have been on a slide for the past four months because of increased supplies from some producers like Australia and Nigeria, and sluggish demand from major consumers like the US and Japan.

"LNG prices have come down considerably in the past quarter," said DM Desai, chief executive at Ahmedabad-based consulting firm Ethical Energy-Petrochem Strategies. "It is because of softening oil prices while the demand from the major gas consuming nations like Japan and US has remained stable."
Gail, the country's largest state-owned gas processing and distribution company, recently booked an LNG cargo at $13.50 per million metric British thermal units (mmBtu), against $17 per mmBtu it paid for the previous cargo. Similarly, Gujarat State Petroleum Corporation, the country's largest LNG trader, booked a cargo for delivery in October at $12 per mmbtu compared to $16 it paid for a cargo in June.
LNG accounts for close to a fourth of India's total natural gas consumption. The country imported close to 55 mmscmd of LNG in 2011-12. Experts say the drop in natural gas prices has come as a relief for Indian consumers, who have been paying more for the gas because of depleting production at home and a depreciating rupee. The price of compressed natural gas recently touched an all-time high of Rs 53 per kg in Gujarat, which accounts for a third of the country's total natural gas consumption. In Delhi and neighbouring cities, CNG prices have increased 25 per cent in just one year. While CNG now costs Rs 38.35 per kg in Delhi, it is priced at Rs 43.10 per kg in Noida, Greater Noida and Ghaziabad.
With supplies dwindling from Reliance Industries' KG-D6 basin on the east coast, most of the country's big oil refiners have become increasingly dependent on imported gas. RIL and Essar are now banking on spot LNG cargos to feed their refineries and power plants. Falling output from D6 has also affected city gas distribution companies, which have not received gas under the administered price mechanism from D6 for almost a year now. These companies are now rejoicing at cheaper imports.

Gas Natural Fenosa, GAIL Sign LNG Supply Deal, India

GAS NATURAL FENOSA of Spain said it has signed a deal to supply approximately 3 bcm of liquefied natural gas for three years to GAIL of India, equivalent to 10% of annual consumption in Spain.
The supply will begin next January.
The contract with Gail strengthens the position that GAS NATURAL FENOSA has in gas sales and marketing in the Pacific and is a significant step in the company’s strategy for growth and diversification in new markets with great potential. The LNG market in India is one of those with the best perspectives for development in the whole world in the coming years due to the growing energy needs of the Asian giant.
In addition to the supply agreement, the two companies have signed an industrial cooperation agreement in order to explore joint development of energy projects in India. GAS NATURAL FENOSA and Gail and will analyse opportunities for collaboration in gas distribution, wholesale and retail marketing and infrastructures, as well as projects abroad.
The Spanish multinational, thanks to this agreement, will be able to establish a framework for cooperation with the leading gas operator in India and to consolidate its presence in the final markets.
The agreement with Gail is another step in the growing internationalisation of the company. In the first half of 2012, the international activities of GAS NATURAL FENOSA represented 42.2% of EBITDA, compared to 34.4% in the same period of 2011.
A Multinational Leader in the Energy Sector
GAS NATURAL FENOSA is one of the leading multinational companies in the gas and electricity sector; it operates in 25 countries and has around 20 million customers and a 15.4 gigawatt power generation capacity.
It is the largest integrated gas and electricity company in Spain and Latin America, the leader in natural gas sales in the Iberian Peninsula and the biggest natural gas distributor in Latin America. With a fleet of 11 methane tankers, it is one of the largest operators of liquefied natural gas in the world and a company of reference in the Atlantic and Mediterranean basins, where it operates 30 bcm.
Gail, Reference Operator in India
In order to meet the growing appétite of Indian market, GAIL has been expanding its global presence to secure long term gas supplies. GAIL earlier signed a 20 year Sales and Purchase Agreement with Sabine Pass Liquefaction LLC, a unit of Cheniere Energy Partners, USA for supply of 3.5 million tonnes per year of LNG. GAIL has also executed the Gas Sales Purchase Agreement with Turkmengaz for 38 MMSCMD for 30 year supply through the TAPI pipeline.
Besides, GAIL has also set up a wholly- owned subsidiary company GAIL Global (Singapore) Pte. Ltd. in Singapore for sourcing LNG, and petrochemicals. GAIL has acquired 20% interest in Carrizo’s Eagle Ford Shale acreage position in USA.
GAIL owns and operates over 9500 Km of high pressure cross country natural gas pipeline network and is in the process of significantly increasing its pipeline network to reach every part of India. Within the next two to three years, GAIL will have a pan-India pipeline infrastructure spanning over 14,500 km.
GAIL (India) Ltd., is India’s principal Natural Gas Company with activities ranging from Gas Transmission and Marketing to Processing (for fractionating LPG, Propane, SBP Solvent and Pentane); transmission of Liquefied Petroleum Gas (LPG); production and marketing of Petrochemicals like HDPE and LLDPE and leasing bandwidth in Telecom sector. GAIL has extended its presence in Power, Liquefied Natural Gas (LNG) re-gasification, City Gas Distribution and Exploration & Production areas through equity and joint venture participations. GAIL registered a turnover of US$7.9 billion and profit after tax of US$708 million for the year 2011-12.

Govt may take action against Mukesh Ambani's Reliance Gas Transportation Infrastructure

The government is considering taking "appropriate administrative action" against billionaire Mukesh Ambani's privately owned RGTIL for delay in building four natural gas pipelines, Minister of State for Petroleum and Natural Gas R P N Singh said today.
Relogistics Infrastructure Ltd (Relog), a unit of Reliance Gas Transportation Infrastructure Ltd (RGTIL), had in 2007-08 won government authorisation to lay Kakinada-Basudebpur-Howrah pipeline, Kakinada-Chennai line, Chennai-Bangalore-Mangalore pipeline and Chennai-Tuticorin pipeline but physical work on these haven't started yet.
Relog cited uncertainty about availability of gas for not building the lines in the stipulated three years.
"Appropriate administrative action in respect of the gas pipelines of RGTIL is under consideration for non-submission of bank guarantee and non-completion of pipeline projects within the stipulated period," Singh said in a written reply to a question in the Lok Sabha here today.
Bank guarantees of RGTIL and its subsidiaries submitted at the time of winning authorisation for laying the pipelines have all expired and have not been renewed.
Singh, however, did not state what action the government could take.

Kochi getting ready for Natural Gas distribution

The first phase of the Regasified Liquified Natural Gas (RLNG) distribution network, the dream project of Kochi, will be dedicated to the Nation on September 10.
The 43-km pipeline network, built by GAIL India Ltd, stretches from Petronet RLNG's five million metric tonne LNG Terminal to the main industrial centres in the city, a press release here said.
Companies like FACT, BSES, TCC, Nitta Gelattin, HOCL and BPCL can now receive RLNG through pipelines and use it to reduce costs, becoming environment friendly, the release said.
In the next phase, the gas distribution project can cover city households ensuring year long cooking gas supply without disruption. The government would also be able to save a major part of the subsidy they give out on LPG cooking gas and utilize it for other productive purposes, it said.
Laying of the pipeline from Puthuvypin to Udyogamandal and from Udyogamandal to Ambalamugal has been completed.
GAIL successfully acquired land from the public to lay the pipeline for about six km in the first phase, it said.
The remaining land in the 43 km stretch was made available by different institutions or companies like Cochin Port Trust, International Container Transhipment Terminal, Indian Navy, Kerala State Electricity Board, Co-Operative Medical College Kalamassery, HMT, FACT, CCK-ROU, Kalamassery Municipality, Kinfra, Cochin Corporation and Smart City.
Work on the 505 km pipeline from Kochi to Mangalore will start soon and when completed, would benefit seven districts from Ernakulam to Kasargod. GAIL would start 26 SV stations (in 50 cent each) and five IP stations (in 1.25 acre each). This trunk Pipeline will facilitate city gas distribution in Kochi, Thrissur, Malappuram, Kozhikode, Kannur, the release said.
RLNG would be made available to NTPC project at Kayamkulam through pipelines along the seabed. The agreement with KSEB on this will be signed soon. Brahmapuram, Cheemeni projects can also look forward to using RLNG as fuel.
The project will lead to major economic growth of the state by creating new jobs and generating Rs 1,000 crore revenue to the state exchequer, the release said.