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Pratim Ranjan Bose

Kolkata, Aug. 20 Differences between Gujarat Gas Corporation Ltd – a British Gas group company – and the GSPC group over marketing of natural gas at Vapi industrial area is now headed for a happy ending.

The companies have decided to join hands in gas distribution, not only in Vapi but the entire district of Valsad.

In a meeting last week, the GSPC group decided to allow GSPC Gas, its city gas distribution arm, to form a consortium with Gujarat Gas for joint marketing of natural gas in Valsad district on profit-sharing basis.

The proposal is expected to be placed before the Gujarat Gas board shortly.

“We have decided to market natural gas jointly with Gujarat Gas in Valsad district on a 50:50 profit sharing basis. The proposal has already been approved by our board,” a GSPC Group official told Business Line.

Gujarat Gas officials, however, refused to comment.

According to industry sources, apart from Vapi, Valsad is home to three prominent industrial zones and may generate a total demand of well over one million standard cubic m a day (mmsmd) of natural gas.

It may be mentioned that Gujarat Gas received approval from the Gujarat Industrial Development Corporation (GIDC) to market natural gas in Vapi industrial area a few years ago.

Accordingly, the company invested Rs 30 crore in laying of retail pipeline network.

Though the network was ready for use by July 2006, gas supply has not commenced till date.

The reasons are non-completion of the Hazira-Vapi trunk pipeline project by Gujarat State Petronet Ltd (a GSPC subsidiary) before the first quarter of 2007-08 and the proposed parallel entry of GSPC Gas in marketing and distribution in Vapi.

The latter has also started investing in creating the pipeline network in the region, which may have led to conflict of interest with Gujarat Gas.

According to industry sources, by joining hands, GSPC and Gujarat Gas have not only removed conflict zones but also created strategic opportunities for both.

GSPC is currently facing a drop in natural gas supplies from the ageing Hazira field (run by a consortium of GSPC and NIKO Resources).

On the other hand, supplies to Gujarat Gas are expected to increase once the capacity expansion at Panna-Mukta-Tapti gas field is through in September.

More Stories on : Alliances & Joint Ventures | Petroleum | Strategy | Corporate Disputes | Gujarat

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