Essar Energy in row with Great Eastern over supply to Phillips Carbon

Pratim Ranjan Bose Kolkata | Updated on March 20, 2011 Published on March 20, 2011

Great Eastern Energy's Asansol-Durgapur pipeline has been the bone of contention between GEECL and Essar Energy in their bid to win over a single customer – Phillips Carbon Black Ltd.

While officially all the companies are tight-lipped on the issue, sources told Business Line that in late 2009 or early 2010, Essar promised to supply up to 60,000 scmd of CBM from its field in Durgapur to the nearby facility of the RPG group outfit. Gas was expected to reduce PCBL's import requirement of carbon black feedstock.

It is learnt that Essar initially intended to start supplies in mid-2010. However, the plan suffered a setback due to delay (considered normal in CBM activities) in stabilising production.

In June 2010, Essar had approached the downstream regulator for authorisation of a dedicated pipeline to the PCBL facility. As is the practice with PNGRB, the application was Web-hosted for public notification and was approved. While Essar was laying the dedicated pipeline to PCBL, GEECL saw a business opportunity.

The company had a stabilised CBM asset in Ranigunj and completed building the pipeline (up to Durgapur) as early as in 2009. The company merely needed to add a spur line to the customer to start supplies. And, it did just that.

In a letter to the Chairman of PNGRB (copy of which is available with Business Line), dated November 29, Essar alleged that while the regulator was yet to grant legal sanction to GEECL's Asansol-Durgapur pipeline, the latter had “surreptitiously started laying” a spur line “to the same customer (PCBL) destination”.

“Since we have not seen any intimation regarding the same (spur pipeline) on the PNGRB Web site, we presume that this line by GEECL is being laid without any authorisation,” Essar said, adding that the YKM Holdings Company was also catering to various other customers in Durgapur-Asansol area without authorisation. Essar was concerned about its investments in laying a dedicated pipeline to PCBL which was scheduled to be commissioned in December 2010, and demanded “action” on the part of the regulator to restrain GEECL.

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Published on March 20, 2011
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