GSPCL eyes 300% rise in sales by March '05

The government of Gujarat-owned Gujarat State Petroleum Corporation Ltd (GSPCL) is targeting an over 300 per cent rise in sales at Rs 1,500 crore by the end of March 2005.

The company had posted sales of Rs 400 crore at the end of last fiscal. GSPCL is also in talks with the Indian Oil Corporation (IOC) and Bharat Petroleum Corporation Ltd (BPCL) to buy regassified liquid natural gas (LNG). On Saturday, the company had signed a 15-year agreement to buy regassified LNG from GAIL India.

"Though there has been demand for gas from the industries in Gujarat, mainly the fertiliser and chemical sectors, we could not meet the demand. With the agreement with GAIL to buy 0.5 million metric tonne per annum (MMTPA) of LNG during 2004-05, we expect our sales to increase by 300 per cent to around Rs 1,500 crore by the end of next fiscal," said D J Pandian, managing director, GSPCL.

According to Pandian, GSPCL will report sales of Rs 450 crore by end of the current fiscal. In the first nine months of the year it had posted sales of Rs 350 crore.

As per the pact with GAIL, gas will be delivered to Gujarat State Petronet Ltd (GSPL), a subsidiary of GSPCL, near Dahej.

GSPCL in turn will transport the gas to different markets in Gujarat. GAIL, a partner of the Rs 2,900 crore Petronet LNG Ltd's (PLL) LNG project which will be commercially commissioned on Monday, holds a 60 per cent stake of the LNG terminal as one of the three off-takers. IOC and BPCL are the other two offtakers holding 30 per cent and 10 per cent stakes, respectively.

GSPCL, which is also into exploration of gas and oil, is getting 3.6 million metric standard cubic metres per day (mmscmd) of gas from the GSPCL-Niko Resources exploration. Following the agreement with GAIL, gas sales at GSPCL is seen increasing by 100 per cent.

The value of gas to be purchased by GSPCL from GAIL will be worth Rs 800 crore per year excluding sales tax.

"We are also talking to other partners of IOC and BPCL to buy LNG. We expect to sign the agreements with these companies in the near future," said Pandian.

However, he denied to divulge the quantity of LNG it is planning to buy from the two firms.

According to a research conducted by Ernst & Young for the state government, the demand for gas in the state stands at 40.2 mmscmd in the current year, which will go up to 79 mmscmd by 2011. Under the existing supply scenario, the supply of gas in 2011 will be 20 mmscmd, thus recording a deficit of 59 MMSCMD seven years later.

At present, the deficit is 13.8 mmscmd in Gujarat which is higher than that in 1998 when the deficit stood at 13.6 mmscmd of gas.

"With GSPCL looking for buying gas from various other sources, the industry may get relieved for sometime, at least till Shell Hazira commissions its 2.5 mmtpa LNG terminal in Hazira following which GSPCL will get another source for buying LNG," said an industry source.