A tug of war is on between GAIL and GSPL India Transco Ltd
(GITPL) over who should have the rights to transport gas from ONGC's Odalarevu
terminal from where the Indian E&P projects gas major's KG Basin gas output is to come in.
GITPL is implementing the cross-country
Mallavaram-Bhilwara-Vijaipur natural gas pipeline and it claims that one of the
major reasons why it was set up was to ferry gas from ONGC RIL tenders contracts, offshore KG Basin
fields, such as the S1 and VA deepwater fields, and eventually gas from the
KG-DWN-98/2 in 2019.
GAIL has now laid a counter-claim to do what is called a tie-in with the Odalarevu terminal from its regional KG Basin network on the ground that it is the nearest pipeline network. GITPL's tap-off point is 13 km away from Odalarevu whereas GITPL's is 50 km away. The ball in now in the court of the PNGRB
GAIL has now laid a counter-claim to do what is called a tie-in with the Odalarevu terminal from its regional KG Basin network on the ground that it is the nearest pipeline network. GITPL's tap-off point is 13 km away from Odalarevu whereas GITPL's is 50 km away. The ball in now in the court of the PNGRB
What is causing "significant adverse changes in gas
demand"?
A worrying point that needs highlighting is the GITPL's
assertion that there are "significant adverse changes in market
demand" that is threatening the viability of the
Mallavaram-Bhilwara-Vijaipur natural gas pipeline. The 1800 km pipeline will
traverse through 33 districts and six states. GITPL also claims that it will be
able to cut down tariff drastically: gas from the KG basin can travel to NFL's
Vijaipur plant at 25% of the current applicable tariff.
But the point is what is what has changed about gas demand in the heart of industrial India through which the pipeline winds it way?
Clearly, demand for gas has not been found to be as buoyant as was anticipated earlier.
But the point is what is what has changed about gas demand in the heart of industrial India through which the pipeline winds it way?
Clearly, demand for gas has not been found to be as buoyant as was anticipated earlier.
The inability of cross-country pipelines in India to stay
viable needs a further investigation. The market for gas is becoming more
dynamic, with a plethora of competing fuels as crude prices continue to stay
low. LPG, FO/LSHS and Pet Coke are competing with gas for the attention of dual
feed furnace owners. Low cost renewable energy may also increasingly emerge as
a competitor.
Undoubtedly, India should ordinarily have an insatiable
appetite for gas but when will demand emerge remains a moot point. Will
disruptive changes -- such as lower for ever crude prices or the advent of
electric car or really low cost renewable energy -- kill this demand
before it emerges?
The jury is still out on this subject.
The jury is still out on this subject.
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