The Hindu Business Line : Piped natural gas may not be a pipedream

Piped natural gas or PNG. On this theme, the headline that pips all the rest, at the time of writing, is the recent offer by Reliance Industries Ltd (RIL) chairman, Mukesh D. Ambani, to bring piped cooking gas for Tamil Nadu by 2008. Savings may be about a third, compared to what LPG (liquefied petroleum gas) costs, it is estimated. RIL is planning to create a southern corridor pipeline, by drawing gas from the Krishna Godavari (KG) basin in Andhra Pradesh. The ambitious scenario that Ambani painted at the India Economic Summit, last week, visualised piped gas for 2 crore homes in a hundred Indian cities, by 2010.

`Piped gas' developments include a mega gas deal — Hong Kong & China Gas Co, `better known as Towngas,' agreeing to buy a 45 per cent stake in Chinese gas distributor Panva Gas Holdings Ltd, which `distributes liquefied petroleum gas and piped gas to 42 Chinese cities.' In return, Panva will acquire 10 operating piped-gas projects in eastern China now held by Towngas, as a Bloomberg report, dated December 4 informs.

These projects are said to have `a high concentration of industrial and commercial users' and so, Moody's Investors Service's view cited in the story estimates `piped-gas sales volume' to `more than double.' And www.chinaknowledge.com reports, in a November 30 posting, that Xinao Gas Holdings, China's largest privately-owned piped-gas distributor, `is in talks with two European gas producers for LNG (liquefied natural gas) supplies.'

Even as more houses closer home anxiously await the arrival of natural gas through pipes, the recently released third edition of the British Utility Report by ABS Energy Research predicts that the UK is nearing end of natural gas self-sufficiency, and is turning a net importer. "The industry is investing heavily in new pipelines to import gas from Norway and the Netherlands in addition to Russian piped gas, with new storage facilities for piped gas, and LNG terminals are being built," states a November 21 dated press release on www.prweb.com.

Ofgem, the UK's Office of Gas and Electricity Markets (www.ofgem.gov.uk) confirms `a 100 per cent increase in investment in energy networks,' while proposing `a 4.4 per cent rate of return on capital in the price control.'

A 4-page `fact sheet' dated November 8, explaining `household energy bills' concedes that gas bills have risen by 71 per cent since 2003. Reason: `Rise in gas wholesale prices.' Do you know that a third of Britain's electricity is generated by gas-fired power stations?

Gas pricing, again, was the topic that occupied the mind of the Petroleum Minister, Murli Deora in the Rajya Sabha. He explained that natural gas producers such as RIL need Government approval for the formula used to calculate gas price.

One learns that the gas producer has to remit the Government's take, meaning `profit petroleum' and royalty. "Profit petroleum is the percentage of oil/gas produced from a field that the Government is entitled to as the owner. Besides, Government also gets a fixed royalty from the field," informs the PTI story dated December 5.

A search for `piped natural gas' on www.onelook.com yields no fruit. And, for PNG, Wikipedia offers a disambiguation page that lists the following: Persona non grata, Portable Network Graphics, Papua New Guinea, Pawnee National Grassland, Penang, Professional Numismatists Guild, Pack `n' Go, and Passive night goggles. If you see a computer file with the extension `PNG', it stands for `Portable Network Graphics,' which is "a bitmap image format that employs lossless data compression," as http://en.wikipedia.org educates. PNG improves upon GIF (Graphics Interchange Format) "with an image file format that does not require a patent license to use." PNG, though, doesn't find place between `pneumothorax' and `PO,' on http://encarta.msn.com.

First find on the Web for `piped natural gas' is a page on www.mahanagargas.com that speaks of `terms and conditions' for PNG supply to domestic consumers. Such as, that `the consumer shall use the gas specifically for domestic or household purpose at the premises only and not for any other purposes.' Mahanagar Gas Ltd (MGL) is a joint venture of GAIL (India) Ltd, BG Group (formerly British Gas), and the Government of Maharashtra.

The MGL project started in 1995 from Chembur, states the site. The current tally is gas connection to about three lakh households in Mumbai, to make MGL `the largest city gas distribution company in India with reference to consumer base.'

The company has laid a network of over 1,870 km of medium pressure and lower pressure polyethylene pipelines and 202 km of high pressure steel network to cater to over six lakh potential consumers in the city. An indication of the infrastructure that Tamil Nadu may need to create before gas comes calling.

ZeroBase@TheHindu.co.in