GAIL may bid for domestic gas for raising supplies to city gas units
Gail India is planning to bid for natural gas from deep water and difficult fields of RIL and Cairn India, that can be sold to city gas distributors (CGD) as an alternative to costly LNG. According to sources, the decision is aimed to tackle the shortage of administered gas provided to CGD companies under priority sector allocation and will help to bring down the prices of auto (CNG) and cooking fuels (PNG).
On April 1, the price of domestic high-pressure-high temperature gas from difficult fields was hiked to $9.92/mmBtu for six months from $6.1/mmBtu. However, this gas is still cheaper compared to the imported R-LNG that costs a prohibitive $37/mmBtu at present and can help CGD companies to save on their input costs.
Sources said, the quantity sourced by CGD players for their production purpose is marginal compared to cargoes booked by GAIL. “If GAIL can source the combined requirement for the CGD industry it can be offered at an economical price while making profit margins for themselves,” sources said. GAIL did not comment on the story.
