GAIL may take over gas marketing from ONGC

GAIL India, the country’s largest gas marketing and distribution company, may take over natural gas marketing from Oil and Natural Gas Corporation (ONGC).

The state-run ONGC currently supplies gas directly to isolated pockets in Gujarat and Assam and thereby earns around Rs 100 crore in marketing revenues.

In May 1992, ONGC handed over gas pipelines and marketing functions connected with natural gas to GAIL. However, it continues to be the marketing agency in certain isolated pockets.

When contacted, a GAIL spokesperson refused to comment on the issue. However, sources close to the development said the proposal is pending at the ministry level.

“Gujarat’s share in the marketing of ONGC gas is about Rs 75-80 crore, while the Assam region contributes about Rs 20 crore,” sources said.

The recent rise in gas prices is believed to have drawn GAIL’s attention to these regions and it has proposed to take over direct marketing of gas from ONGC.

ONGC directly markets gas to the Ankleshwar and Bharuch industrial areas in Gujarat and the tea gardens in Assam.

An ONGC executive said even if the Centre approves the move, it will not make much difference as the marketing of gas contributes a very small portion of the company’s overall turnover. This might, however, lead to some shifting of manpower.

Earlier this year, GAIL India had signed contracts for taking over the marketing of natural gas produced from Panna-Mukta and Tapti fields. The company had proposed to buy the entire 17 million standard cubic meters per day of gas produced from the fields. It signed contracts for selling gas to the consumers, including RIL, at the government-approved price of $5.7 per million British thermal unit (mBtu).