[Premium] Indian Gail Gears Up Supplies
India’s largest gas marketer Gail is working with policymakers in the Indian government on ways to make natural gas complement renewable energy technologies including gas-based fuel cells, chairman BC Tripathi told Gail's annual general meeting in New Delhi on September 12.
The Indian power sector is witnessing a significant increase in solar-based power technologies across various states. With rising capacity, solar power tariffs in India have plunged to as low as rupees 2.44 (3.8 US cents)/kWh.
Gail has also signed a gas supply contract with Ratnagiri Gas & Power which will generate 500 MW of gas-fired electricity for Indian Railways, Tripathi said.
Tripathi believes fertilizer sector is moving towards a new normal, due to ongoing capacity addition. “The next wave of real increment in gas offtake by the sector is expected once the newer capacities of fertilizer production get progressively commissioned during 2018 to 2020,” he said.
The company has tied-up regasifed LNG supply agreements with upcoming fertilizer plants that are under revival at eastern Indian cities of Gorakhpur, Barauni and Sindri. In addition, gas supply contracts are tied-up with private fertilizer units in Durgapur and Kota. Gas supplies shall commence in phases from 2018 onwards.
City gas distribution
The Indian government wants to expand the share of gas in country’s energy mix and city gas distribution (CGD) is expected to play a major role generating the demand for gas. Gail is working on setting upcity gas distribution networks in seven important towns in east India, namely, Varanasi, Patna, Ranchi, Jamshedpur, Kolkata (Calcutta), Bhubaneshwar and Cuttack.
The Varanasi CGD project is targeted for commissioning during the current year, at least 12 months ahead of schedule, Tripathi said. The Bhubaneshwar CGD project is also under progress to commence city gas service during this year through measures as an interim arrangement before pipeline connectivity reaches the city. CGD project activity is also progressing as per schedule in other five cities and being commissioned in synch with the ambitious $2bn Jagadishpur-Haldia-Bokaro-Dhamra Natural Gas Pipeline (JHBDPL). This 2,539-km pipeline is expected to be fully completed by December 2020. The first phase of the pipeline will be complete by end-2018 and the second phase by end-2019.
Kochi-Mangalore gas pipeline
Gail’s much delayed Kochi-Mangalore gas pipeline project is finally making steady progress and is targeted for commissioning during 2018-19 fiscal year ending March 2019. This comes as good news for Petronet LNG’s grossly underutilised Kochi LNG import terminal. This pipeline shall facilitate gas supplies to fertilizer, refinery, petrochemical sectors of Mangalore and other areas. Once the pipeline becomes operational, use of the Kochi LNG terminal is also expected to rise substantially.
Gearing up for supplies
Overall, Gail is gearing up to augment gas supplies across various units of fertilizer, power, petrochemicals, industrial, CGD sectors equivalent to over 3mn mt/yr of LNG starting January 1, 2018.
Petronet LNG has a long-term deal with Qatar's RasGas to import 7.5mn mt/yr of LNG, of which almost 5mn mt/yr goes to Gail.
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