The Hindu Business Line : GAIL (India) clarifies

With reference to "Petronet LNG resorts to distress sale of gas" (Business Line, April 24), this is to clarify that the full quantity of 2.5 MMTPA of R-LNG from the Dahej project available in the first year has already been sold to 39 consumers in the fertiliser and power sectors and industrial segments such as steel, automobiles, glass, ceramics and so on. Incidentally, GSFC, a fertiliser sector customer of GAIL, is the first R-LNG consumer in the country to draw R-LNG from the Dahej project at the current offered price.

As of today, even if any customer is willing to enter into a Gas Sale Agreement for supply of R-LNG, it would have to wait till FY2005-06, that is, when the Phase-II of the Dahej project achieving the capacity of five MMTPA is expected to commence.

We would also like to state that the existing gas-based fertiliser plants are facing acute shortfall in gas supply of about 40 per cent and they have been requesting for increase in the supply of gas/R-LNG to their units. In this regard, Petronet is looking into the possibility of bringing additional supplies from Qatar at the earliest.

Therefore, the question of distress sale to fertiliser units on account of their unwillingness to sign contracts at current offered prices does not arise.

Till date, all the five LNG cargoes have been unloaded within the planned cargo unloading schedule and no delays have taken place while unloading the shipments in Dahej.

Therefore, there was no loss to Petronet on account of gas shipment remaining stuck at Dahej port.

The price of gas charged by GAIL for the APM gas has been fixed by the Government vide the Gas Pricing Order dated September 18, 1997.

Accordingly, GAIL is selling domestic gas to customers including fertiliser units at the prescribed rate and no subsidised rates are being offered.

Since the commencement of R-LNG supply from Dahej, the APM gas resident in the Hazira-Vijaipur-Jagdishpur Pipeline system has been gradually displaced by R-LNG and the APM gas so displaced has been supplied to the fertiliser plants. Therefore, the statement that fertiliser units are being supplied R-LNG at subsidised prices is not correct.

Jyoti Kumar

Deputy Manager

Corporate Communication

GAIL (India) Ltd

New Delhi

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