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Gujarat Gas Company Limited (GGCL) has executed a long-term gas supply contract (GSC) with its parent Gujarat State Petroleum Corporation (GSPC) for purchase of 0.65 million metric standard cubic metre per day (mmscmd) for next 12 years.
As per the agreement, GSPC will supply imported Regassified liquefied natural gas (R-LNG) to GGCL from January 1, 2014 up to July 01, 2025. The move is seen as a major relief for GGCL as it will get assured gas supply for a long period.
Following the pact with GSPC, GGCL’s dependence spot LNG will reduce as it is expected to meet nearly 50% of its total R-LNG requirement of around 1.3 mmscmd.
In September last year, GGCL had signed the MoU with GSPC, which had agreed to supply upto 0.85 mmscmd of gas to GGCL.
In a statement filed with the exchanges, “GGCL informed that pursuant to the MoU executed between GGCL and GSPC on September 03, 2013, both the companies have executed Gas Supply Contracts for supply of R-LNG up to 0.65 million metric standard cubic metre (mmscmd) on long term basis.”
GGCL will buy 0.574 mmscmd (of gas) between period March 1, 2014 up to July 01, 2025, and 0.076 mmscmd between January 01, 2014 and July 01, 2025, the company statement said.
The price of gas will be determined in the relevant GSCs and it is expected to be formula based.
Meanwhile, GGCL is also exploring other options to secure long-term gas supplies to further reduce its dependence on the costly spot LNG.
GGCL, a subsidiary of GSPC Distribution Networks Ltd (GDNL), supplies around 2.8 mmscmd of gas to its industrial, domestic and auto customers. Nearly 50% or 1.3 mmscmd of that is R-LNG, which is largely sourced through medium term contracts or from spot markets.
The company has about 410,000 industrial, commercial and domestic customers through its pipeline network and CNG to over 200,000 vehicles through 56 retail outlets.
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