Gujarat Gas and GSPC sign MoU for long term gas supply deal

NEW DELHI: Gujarat State Petroleum Corporation Limited (GSPC) signed a memorandum of understanding with its recently acquired Gujarat Gas Company Limited (GGCL) for a long term gas supply deal. As per the MoU, GSPC has agreed to supply 0.85 mmscm of gas per day to GGCL from January 1, 2014 to June 30, 2025.

GSPC MD Tapan Ray and GGCL MD Sugata Sircar signed the MoU in Gandhinagar on Tuesday. It is effective till the December 31, 2013 or the signing of the relevant gas sales contracts (GSCs), whichever is earlier. Gas price will be determined in the relevant GSCs and it is expected to be formula based.

GGCL caters to 4,04,000 industrial, commercial, domestic and CNG customers through its pipeline network and CNG to over 200,000 vehicles through 56 retail outlets.

Commenting on the development, Sircar said, "The signing of this MoU is an important step towards securing long term gas supplies for industrial, domestic, commercial and CNG customers of Gujarat Gas. GGCL has always been committed to maintain uninterrupted supplies to its customers. Out of around

2.8 mmscm of gas per day used by GGCL's customers currently, nearly 50% is RLNG which is largely sourced through medium term contracts or from spot markets. Under the MoU with GSPC, we will be able to source assured supply of 0.85 mmscm of RLNG per day for 11.5 years."