News Detail

<p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">ONGC informed GAIL that it has conveyed the evacuation constraints being faced due to restriction in gas offtake by GAIL ex-Uran and also resulting in non payment for differential between APM and non-APM gas supply ex-Uran for the period from Feb&#39;12 to Nov&#39;13.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><u>Payments of non-APM gas ex-Uran:</u> As per Term Sheets for supply of non-APM gas ex-Uran to GAIL, Article 16 reads that, &quot;above prices shall be revised as per orders from MoPNG and same shall be binding on Seller and Buyer&quot;. MoPNG vide MOM dated 04.12.12 for the meeting held on 12.11.12, decided that &quot;GAIL should have ab-initio charged non-APM rate to non-APM gas supplied to the consumers instead of charging APM rate for the same gas in Uran region.&nbsp; </span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Based on the above, ONGC has raised Debit note on GAIL dated 19.12.2013 for an amount of INR 132.12 Crores for the period from Feb&#39;12 to Apr&#39;13 and debit note of INR 124.22 Crores for the period from May&#39;13 to Nov&#39;13, towards such differential. However, the same has been returned unpaid by GAIL totally disregarding MoPNG directives.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">In this regard, it&nbsp; is seen&nbsp;&nbsp; that&nbsp;&nbsp; whenever&nbsp; MoPNG&nbsp;&nbsp; orders&nbsp; were&nbsp; commercially advantageous to GAIL depict clear contractual promising Gail implemented such orders fullwith disregarding the mutual agreement as can be seen from the following cases in the recent past:</span></span></span></p> <ul> <li style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Compensation/re-imbursement to ONGC for compression charges for APM gas which GAIL was paying as per provisions of GSA dated 7.7.2006 but immediately stopped after MoPNG order dated 16.6.2010</span></span></span></li> <li style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Tolling and processing charges for North Tapti gas which was as per Term sheet dated 30.02.2012 which GAIL was paying but latest stopped based on MoPNG order dated 08.10.2013</span></span></span></li> </ul> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">In the instant case, even though MoPNG orders as well contractual provisions as are making it obligatory for GAIL to ab initio make payment at Non ARM prices, GAIL is disregarding both.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial"><u>Evacuation and utilization of non-APM gas ex-Uran:</u> ONGC has been supplying gas ex-Uran Plant to GAIL at almost same pressures since the time of handing over of marketing functions. However, in the recent years, GAIL is not able to maintain line pressure and drawl rate within the uniform hourly rate required as per GSA, owing to erratic drawl of MGL. This has led to the Intriguing situation where GAIL alleges that anchor consumers of APM gas ex-Uran are ready to accept only ONGC&#39;s APM gas but non APM gas but at the same time ready to receive much higher priced R-LNG supplied by GAIL. This situation is more intriguing as both APM and Non APM are being supplied in a commingled form to consumers.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Moreover, in line with recent MoPNG guidelines dated 14.11.13, GAIL is obliged to partially supply the requirement of MGL from RLNG sources. ONGC feels that GAIL should implement this directive not only by swapping on paper but by implementing actual flow of RLNG from GAIL&#39;S DUPL, so that line pressure in the Mumbai Regional Network of GAIL is made stable, as most of the pressure fluctuation is due to the erratic drawal of MGL.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">GAIL is therefore rquested to chalk out action plan and implement the same to address and resolve the above Issues.</span></span></span></p> <p style="text-align: justify;"><span style="color:#696969"><span style="font-size:11px"><span style="font-family:arial">Source:SNP Infra Research</span></span></span></p>