SMEs in KG basin facing crisis due to gas shortage

A gas-based industrial zone at Krishna-Godavari basin is facing a shortage of gas and many small and medium scale (SMEs) industries which depend on gas supply from ONGC are facing a crisis, as per the industry representatives.

The SMEs claim that they are receiving only 15,000 standard cubic meters per day (scmd) of gas from ONGC, as against the agreed 1,00,000 scmd.

The KG Basin GAIL Isolated Wells Consumers Association (KGBGICA) -- an association of gas based industries operating in various isolated gas fields in the KG basin -- said that for the past one month, ONGC had drastically cut down gas supply from its Lingala-Kaikalur gas field in the KG basin to nine customers of GAIL, thereby disrupting the manufacturing processes and leading to heavy losses.

The association said ONGC had been supplying to one of its other customers as per the allocated quantity of 75,000 scmd. KGBGICA, which signed an agreement with ONGC for gas supply in 2003, later signed another agreement with GAIL after it became gas carrier for the region.

The KGBGICA approached the petroleum ministry recently, protesting the alleged discrimination by ONGC against the GAIL consumers.

"As many as 10,000 people get direct or indirect employment from these SMEs. But future seems bleak as there is no assurance from ONGC," one of the KGBGICA members told PTI.

Alternatives like Propane are six times costlier, sources said. When contacted, an ONGC official said the shortage was due to the depletion of gas in the wells, but did not say when the supply would reach the normal levels.

"Kaikalur - Lingala Assets are small and marginal fields. Also these fields are operating for more than a decade. Since reserve is small, we observed a fast natural depletion in these fields. As regards gas supply to GAIL consumers, at present the supply is around 25,000 scmd," an email reply from ONGC said.