Covid-19: India’s plan to build gas economy receives setback

By Sarkaritel March 30, 2020 17:04

New Delhi, March 28  Indias plan to develop a gas economy with the cleaner fuel gradually becoming the mainstay of countrys energy security needs has received a major setback as the Covid-19 pandemic has severely impacted demand, resulting in curtailed operations globally.

In India the current lockdown has led to 15-20 per cent overall demand hit due to the closure of most of the factories in sectors excluding fertiliser, power and refineries. This has resulted in curtailed operations by gas producing companies such as OIL and ONGC,

According to brokerage firm Emkay, GAIL may see a 15-20mmscmd decline in marketing volumes as the lockdown progresses, while transmission volumes may also decline up to 10-15mmscmd.

In addition, with the closure of distribution channels and truck transportation, GAIL’s petchem sales have stopped.

Other gas companies such as GSPL have seen its throughput down by 5mmscmd, with CGD being the major reason. Morbi ceramic offtake is seen falling by over 4mmscmd to under 3mmscmd currently, while CNG sales in Gujarat is down 80 per cent.

CNG sales in Delhi and Mumbai are also estimated to be down 70-80 per cent as except for a reduced number of buses and essential service vehicles, other vehicles remain mostly off-road.

Indraprastha Gas Ltd (IGL) had said that it will rationalise its services and operate only 55 of its CNG stations in Delhi-NCR till March 31 due to the ongoing lockdown.

Source said that IGL has closed 95 of its 150 COCO outlets to rationalize volumes.

Commercial piped natural gas (PNG) volumes are also significantly down as restaurants and hotels are closed, and the scenario is similar for industrial PNG demand from MSMEs.

Dahej terminal’s utilization is likely to be down by 20 per cent while It would be the same with other LNG terminals.

The Emkay report has further said its channel checks with ONGC indicate a 5-7mmscmd decline in gas sales volume due to lower demand although the company is trying to shut down some wells and reduce flow-rate to mitigate the impact.

Oil India’s gas demand has also been hit and would be 7-8 per cent with reduced offtake from smaller industries such as tea gardens.

Crude oil supplies are not likely to be impacted as the lower refinery run-rate is likely to impact imports first. While petrol pump dealers have indicated 70-80 per cent hit to auto-fuel sales volumes, company checks suggest it to be 50 per cent during the lockdown,” the brokerage said.

By Sarkaritel March 30, 2020 17:04