Gujarat Gas Company Ltd, GSPC sign MoU for long-term gas supply deal

MUMBAI: Gujarat Gas Company Ltd (GGCL) and Gujarat State Petroleum Corporation Ltd ( GSPC) today entered into a Memorandum of Understanding (MoU) for a long-term gas supply deal, a top company official said.

The MoU was signed by GSPC Managing Director Tapan Ray and GGCL's Managing Director Sugata Sircar at Gandhinagar in Gujarat.

As per the MoU, GSPC has agreed to supply 0.85 million standard cubic metres per day (mmscm) of gas per day to GGCL from January 1, 2014 to June 30, 2025, a statement issued here 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," Sugata Sircar said.

"Out of around 2.8 mmscm of gas per day used by GGCL's customers currently, nearly 50 per cent is RLNG (re-gasified liquefied natural gas) 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," Sircar added.

The MoU is effective till December 31 this year or the signing of the relevant Gas Sales Contracts (GSC), whichever is earlier.

The price of gas will be determined in the relevant GSCs and it is expected to be formula based, the release said.

GGCL, a subsidiary of Gujarat Distribution Network Ltd (GDNL), currently distributes approximately 2.8 mmscmd of natural gas. GGCL continues to be India's premier gas distribution company with a proven expertise in distributing gas to the entire range of customers - industrial, commercial, domestic and CNG.

GGCL distributes gas to about 404,000 industrial, commercial and domestic customers through its pipeline network and CNG to over 200,000 vehicles through 56 retail outlets