Gujarat Gas, GSPC sign MoU for long term gas supply

GSPC has agreed to supply 0.85 mmscmd of gas to GGCL from January 1, 2014 till June 30, 2025

State-owned gas distribution major, Gujarat Gas Company Limited (GGCL) has signed a memorandum of agreement with Gujarat State Petroleum Corporation Limited (GSPC) for long term gas. As per the MoU, GSPC has agreed to supply 0.85 million metric standard cubic meters per day (mmscmd) of gas to GGCL from January 1, 2014 till June 30, 2025.

The MoU is effective till the December 31, 2013 or the signing of the relevant Gas Sales Contracts (GSC), whichever is earlier. Price of gas will be determined in the relevant GSCs and it is expected to be formula based, an official statement stated.

“The signing of this MoU is an important step towards securing long term gas supplies for industrial, domestic, commercial and CNG customers of Gujarat Gas,” said Sugata Sircar, managing director of GGCL.  

“Out of around 2.8 mmscmd of gas used by GGCL’s customers currently, nearly 50 per cent is RLNG, which is largely sourced through medium term contracts or from spot markets. Under the MoU with GSPC, we will be able to source assured supply of 0.85 mmscmd of RLNG for 11.5 years,” he said.

The MoU was signed by GSPC’s managing director, Tapan Ray, and Sircar at Gandhinagar today.

GGCL, a subsidiary of GSPC Distribution Networks Ltd (GDNL), currently distributes approximately 2.8 mmscmd of natural gas to the entire range of customers - Industrial, Commercial, Domestic and CNG. GGCL supplies gas to about 404,000 industrial, commercial and domestic customers through its pipeline network.

GSPC hikes gas prices for CNG, industrial users

State-run GSPC Gas Company Ltd, a subsidiary of Gujarat State Petroleum Corporation Ltd (GSPC) has hiked natural gas prices for its auto and industrial customers. The company has increased the Compressed Natural Gas (CNG) prices by Rs 3 per kg, while industrial gas will be costlier by Rs 1.90 per standard cubic meter (SCM), a GSPC official informed. The new rates will be applicable from September 4.

“Rupee’s fall against dollar has adversely affected gas prices for the company. Therefore, we had to pass on the increase in gas prices to the consumers. We have already informed the customers about the same,” said the official.

Now, CNG will cost Rs 65.15 per kg, while the industrial gas will cost in the range of Rs 36 per scm to Rs 41.90 per scm. In June this year, GSPC had increased gas prices by Rs 2 per kg for CNG and upto Rs 4 kg for piped natural gas, citing non-allocation of cheaper gas.