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http://www.financialexpress.com/news/gails-prospects-brighten-as-india-moves-toward-clean-energy/556807/
The prospects of public sector natural gas marketer GAIL look brighter as the country’s energy consumption pattern shifts towards this comparatively benign fuel. The increased availability of natural gas will help the company to improve utilisation of its pipeline capacity.
GAIL is also increasing its presence in downstream petrochemicals and gas retailing sector even as it moves upstream to secure supplies for its pipeline network. There are significant upsides for all these businesses.
The company plans to increase its pipeline network from 7,220 km to 13,825 km by the financial year 2012-13 and has lined up investment of Rs 30,000 crore.
In India, the pace of capacity addition in pipeline network has been rather slow until recently, because of the absence of a regulatory authority and the low availability of natural gas from domestic sources. But now that the government has put in place a regulatory body, the Petroleum & Natural Gas Regulatory Board (PNGRB), pipeline projects are likely to be rolled out at a faster pace.
New pipeline projects will be allocated for implementation through the competitive tariff bidding route instead of the nomination basis as earlier. However, GAIL is expected to bag most of the projects given its expertise in the field.
Domestic production of natural gas is expected to double on the back of increased production from the Krishna-Godavari (K-G) basin. Meanwhile, the country is importing LNG to meet the gap in the domestic supply of natural gas. The company is expected to earn more revenues from gas transportation & marketing because of higher volumes.
GAIL’s strategy is to integrate vertically in the upstream hydrocarbon sector as well as in downstream retail gas, petrochemicals. The company has participating interests in 27 oil & gas exploration blocks in India and abroad. Its Cambay basin block has started production and other discovered blocks are also getting ready for production. The company also expects to benefit from increased LNG availability in coming years. The total LNG availability in the country is expected to increase to 56 million standard cubic metre per day (mmscmd) by 2011-12 from the current 30 mmscmd.
GAIL is also increasing its presence in the trading of imported natural gas. It is buying LNG under long-term contract as also from the spot market. Trading in natural gas is a lucrative business and volumes are expected to grow fast.
PNGRB has identified more than 200 cities along the existing and proposed gas...
