In a move to safeguard industrial operations amid international volatility and internal production hurdles, Rashtriya Ispat Nigam Limited (RINL), the corporate entity of the Visakhapatnam Steel Plant, has officially transitioned a portion of its energy and fuel requirements to piped natural gas (PNG).

The shift highlights a growing trend among heavy industries to seek more stable, cost-effective energy and fuel alternatives in an increasingly unpredictable global market.

This pivot comes as a response to a dual crisis involving a drastic shortage of liquified petroleum gas (LPG) owing to the ongoing West Asia conflict and a decline in the plant’s own high-value by-product coke oven gas (COG) generation. The COG is produced from coke oven batteries when coal is heated to extremely high temperatures in the absence of air to produce coke.

The steel plant, traditionally relies on a combination of LPG and COG to fuel its extensive operations. These gases are essential for high-precision tasks such as the cutting of steel booms. Under peak operating conditions, the plant requires approximately 45,000 cubic metres of gases every hour. However, the plant recently faced a significant deficit of 15,000 cubic metres per hour. This shortfall was exacerbated by the declining efficiency of its five coke oven batteries and the sudden spike in prices and shortage for imported fuel LPG following the West Asia war from February 2026.

“The price of LPG, which stood at roughly ₹70,000 per tonne prior to the conflict, surged to a staggering ₹1.15 lakh per tonne. Recognising that continuing with such high input costs was unsustainable, the management entered into urgent negotiations with the Indian Oil Corporation Limited (IOCL) to secure a supply of piped natural gas,” an RINL official told The Hindu.

To facilitate this transition, a dedicated 4.5 kilometer pipeline was constructed, connecting the IOCL’s liquefied natural gas hub at the AP Medtech Zone in Visakhapatnam to the steel plant’s gas mixing station.

“The pipeline laying began on April 2, and by May 5, the first flow of natural gas was integrated into the plant’s systems. The first phase currently delivers 18,000 standard cubic meters per day. Plans are already in place for a second phase, which aims to increase this supply to 62,000 standard cubic meters per day. This second phase project expected to be completed within the next year,” an IOCL official told The Hindu.

From a financial perspective, the transition to piped natural gas offers a clear advantage.

“While one giga calorie of energy produced by LPG costs ₹9,000 to the Vizag steel, the same amount of energy produced by PNG costs only ₹6,500 to us. This cost-benefit analysis, coupled with the reliability of a piped supply compared to the logistical uncertainties of imported fuel during wartime, suggests that the steel plant may eventually phase out its reliance on LPG entirely,” the RINL official said.

For now, the facility continues to use mix of both fuels to bridge the energy gap, ensuring that production remains steady despite the technical challenges facing its aging coke oven infrastructure. This shift not only stabilizes the plant’s immediate future but also aligns it with broader national goals of utilising cleaner, more efficient energy sources, both IOCL and RINL officials said.

Energy transition

Heavy industries seek stable fuel alternatives with global markets being unpredictable

Cost Comparison per Giga Calorie

PNG : ₹6,500

LPG: ₹9,000

LPG Price Surge in 2026

Price before West Asia war: ₹70,000 per tonne

Current price: ₹1,15,000 per tonne

IOCL supply phases

Phase one current supply: 18,000 standard cubic meters per day

Phase two target supply: 62,000 standard cubic meters per day

Estimated completion for phase two: May 2027.