Corporates make a beeline to sign up gas supply deals

Apart from this, the Rs 2,000-crore Adani Exports Ltd, a star trading house and also a majority partner in the joint venture Gujrat Adani Port Ltd at Mundra along with the state government has also signed MoUs in the natural gas sector.

Sources revealed that the Adani group has signed an MoU with Petronet LNG Limited which will be setting up an LNG terminal at Dahej for the further distribution and supply of natural gas to domestic, commercial and industrial users in the Vadodara-Mehsana route. In fact, the group has already received in-principle approval from the Ahmedabad Municipal Corporation for laying pipelines and distribution of natural gas to end users on the route.

Additionally, the Adani group has also signed up an MoU with GSPL to avail of their trunk pipeline service to source gas from various tap points on the Vadodara-Mehsana corridor. It may be mentioned that GSPL, a subsidiary of the Gujarat State Petroleum Corporation, would be the main agency for laying down a common pipeline for the transportation of LNG in the state. However, while the majority holding in the Rs 3,000 crore project for setting up a single common infrastructure for transportation and distribution of gas would be retained by GSPL to ensure that no single private sector player acquires monopolistic rights over the pipeline, GSPC has decided to offer upto 49 per cent equity to private sector players with a maximum cap of 11 per cent for any single company. Several players including Gas de France, British Gas and Enron have already indicated their willingness to participate in the project, sources said.

State government sources revealed that HOEC and British Gas have also signed up MOUs for distribution. However, sources close to the deals said that signing such MOUs at this juncture did not make too much sense in the absence of a Gas Regulation Act. The state government has been planning to enact a legislation to ensure first that there is no duplication of infrastructure for transportation of gas in the state and second that the gas is accessible to anyone. The Act, however, is still to be placed in the State Assembly. As a source said, "At the moment anyone can sign up MOUs as no licence is required to get in the field of natural gas distribution. But the scenario can change radically once the Act comes into place and in all likelihood GSPL itself will make a concerted bid to get into the field of distribution to end-users as well as this will be a potentially lucrative field." The sole pre-qualification criteria for signing up MoUs for gas distribution at present is the project management strength of thepromoter and his financial capability, sources said.