Small gas consumers from Gujarat heaved a sigh of relief as the Centre reversed its decision regarding the pricing of gas produced from small or isolated fields. The latest decision allows existing users to procure gas in line with their existing contracts without requiring bidding as proposed in the earlier regulations.

The Gujarat Isolated Fields Natural Gas Consumer Industries’ Association (GIFNGCIA) said the move will help the small industries engaged mainly in the ceramics raw material manufacturing and sodium silicate, among others. "Nearly 75 units from Gujarat alone will benefit from this decision. This will allow us to source gas without going for the bidding till the contracted quantity. We understand that for additional requirement there will be bidding process," said Hasmukh Thakkar, president of the association.

Small units across the country consume 800,000 cubic meters per day (cmd) of gas from the small and isolated fields of ONGC. "In Gujarat, we consume about 5-5.5 lakh cmd of gas, which is bought at non-APM rate," said Thakkar. Gujarat alone has about 400 isolated gas fields under three assets of the public sector gas producer.

The Centre had revised the guidelines for pricing of gas from small or isolated fields, which are located mostly near sea creeks. On December 19, 2014, the revised guidelines were issued requiring bidding for gas produced from such fields and the existing contracts was to be renewed.

"The latest move has once again enabled existing units to renew the gas contracts and use the gas from such fields as they used to do prior to the revision in the guidelines made in December, 2014," said Thakkar.

The gas produced from such fields has low pressure and supplied to small industrial consumers on fall-back basis. If not supplied to consumers, the gas has to be flared up.

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