The Hindu Business Line : GAIL not to reduce gas supply through HBJ pipeline

THE confusion over supplies through the Hazira-Bijapur-Jagdishpur (HBJ) pipeline by GAIL beginning April 1 is expected to be resolved soon with the intervention of the Union Ministry of Petroleum and Natural Gas.

According to informed sources, GAIL may have to accept a price rise by the Panna-Mukta-Tapti joint venture between British Gas, Reliance and ONGC.

Meanwhile, GAIL India Ltd has also clarified that it will not be reducing gas supplies along the HBJ system. The company had previously told users that it would cut supplies to the extent of 6.75 million standard cubic metre (mmscmd) beginning April 1.

Supplies were scheduled to be reduced by 55 per cent for private sector consumers and 30 per cent for PSUs.

The notice has created some confusion among the user industries, which include a host of fertiliser and power plants. NTPC, consuming over10 mmscmd of gas in its power stations at Kawas, Anta, Auraiya, Dadri and Faridabad, was expected to be the worst affected because of the supply cut.

"We do not foresee any cut in supplies beginning April 1 as the PMT joint venture has agreed to charge market determined prices for the gas supplies. GAIL is still negotiating the prices," a GAIL spokesperson said.

On the other hand, sources in the joint venture blamed GAIL for creating confusion over supplies. "We have never denied supplies to GAIL. As per the purchase agreement, we were well within our rights to increase the price of PMT gas. We are allowed by the Ministry to directly market our produce if GAIL fails to offer the right price."

The joint venture had previously asked for a price similar to that of regassified LNG (R-LNG), which is close to $4.2 per million tonne British thermal unit (mmbtu) as against the existing APM price of $2.6 per mmbtu, which is inclusive of transportation cost.

GAIL, however, had described such a price rise as unviable and unacceptable by the market.

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