Adanis likely to source gas from GAIL

To invest Rs 445 crore for gas distribution

With the delay in the commissioning of the liquiefied natural gas (LNG) terminal of Shell Hazira Gas Pvt Ltd, gas buyers in the state are now in search of stable suppliers.

The Adani group company Gujarat Adani Energy Ltd (GAEL) has already initiated talks with GAIL India for buying additional gas to meet its requirements of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG). The company has put up a CNG and PNG distribution network in Ahmedabad and Vadodara.

Gujarat chief minister, Narendra Modi, inaugurated the first CNG station of Ahmedabad and first from GAEL in the city's Maninagar area on Friday evening.

Sanjay Gupta, chief executive officer (CEO) of Adani group, said that GAIL would be a preferred gas supplier for the Adanis as Shell's LNG terminal project has now been delayed for at least two months.

The Adanis are at present buying gas from Gujarat State Petroleum Corporation Ltd (GSPCL). the need for gas is expected to be over 1 million metric standard cubic metres per day (MMSCMD) in the next two months.

"We would be operating 10 CNG stations in the Ahmedabad by March, 2005 and the number would go up to 30 in next one year. Our gas requirements would also be much higher as we also expect to start selling CNG in Vadodara by March, 2005. At present our gas requirements are met by GSPCL, but for additional supply we are looking for new gas sellers and talks have been initiated with GAIL," Gupta told Business Standard.

GAEL is also targeting to connect 10,000 households under its PNG network in Ahmedabad by June. It has already commenced gas supplies to industries.

The delays in commissioning of the LNG terminal by Shell at Hazira near Surat has caused lot of apprehension among the industry. No one is quite sure about the exact date when the terminal would be commissioned. A source close to GAEL said that even GSPCL has initiated talks with GAIL and Petronet LNG Ltd (PLL) for buying additional gas.

Even GSPCL managing director, D J Pandian, during a recent meet in energy at Indian Institute of Management-Ahmedabad (IIMA) publicly expressed doubts over the timely commissioning of Shell's 2.5 MTPA terminal.

While listing down the present availability of liquefied natural gas in the state, Pandian had said that while Shell Hazira has already announced that its LNG terminal will have a capacity of 2.50 million metric tonnes per annum (MMTPA), a lot of questions still remain to be answered.

"Yes, Shell has put the necessary infrastructure in place and is going ahead with the project, but a lot of questions still remain unanswered and it thus creates uncertainty. In either case, it appears as if Shell will supply gas to industries south of Surat, including Maharashtra," Pandian had said.

Shell Hazira also has not yet come out with the detail how it would be sourcing gas for its Hazira terminal and announcements of signing gas purchase agreement with buyers, also has not been made yet.