Gail sets up satellite LNG station in Bhubaneswar
NEW DELHI: GailNSE -0.75 % has set up a satellite liquefied natural gas (LNG) terminal in Bhubaneswar to supply local customers in the absence of a gas pipeline — an innovative model that may get replicated by other city gas distributors eager to quickly start supply in new licence areas where gas pipelines are yet to reach.
City gas licences have proliferated lately in the country: the downstream regulator offered 86 licences last year, and the process to award another 50 is under way. Just a year ago, licences were limited to 92 geographical areas that covered just a fifth of country’s population. After the current round of licensing is complete in a month or so, 70% of the country’s population will have been covered.
But taking gas to people can take much longer than distributing licences. Gail, which has a licence to supply gas to Bhubaneswar, decided last year not to wait for the gas pipeline, which is expected to connect the city next year. It started using gas cascades to supply natural gas to homes, shops and vehicles. This involved bringing in gas cascades from Andhra Pradesh to serve local demand, which is about 3,800 kg a day.
Last month, Gail switched its supply method. It started operating a satellite LNG storage and regasification terminal in Bhubaneswar, which can cater to 3,000 compressed natural gas (CNG) vehicles and 1,000 homes. This is the first such operation in the country but satellite LNG terminals are quite popular in several countries to supply gas to areas where laying gas pipelines are difficult or economically unviable.
Gail’s terminal contains two verticals tanks of 20 kilo litres each, and low pressure vaporiser for supply to homes, and high pressure vaporiser for CNG vehicles. Each tank has to be replenished every 3-4 days by LNG brought by road from Gujarat port.
“This is a short-term arrangement until the Urja Ganga gas pipeline reaches Bhubaneswar. Using LNG station is better than using gas cascades as the latter involves higher transportation cost and increased delivery uncertainty,” a Gail executive said.
Sourcing gas via satellite LNG station is much cheaper than using cascades. Pipeline gas, however, is much cheaper than both.
“This can be a model for other city gas distributors as well who would want to start operation and tap customers before the main gas pipeline has reached their licence areas,” said the executive.
Many companies, which have obtained licences in the recent round, do plan to start serving customer this year. Indian Oil Corp, which has more than a dozen licences individually and in joint venture, plans to start CNG stations by the middle of this year in its new licence areas. It is tying up with Gail for supply and plans to use cascades to ferry gas.
The Economic Times 08-02-19