GAIL to invest Rs 18,000 cr in pipeline projects

New Delhi: GAIL (India) Ltd plans to invest Rs 18,000 crore in new pipeline projects across the country in the next few years.

The investment is expected to shore up the company's revenue through transmission business by Rs 3,800 crore over the next 3-4 years to Rs 5,800 crore from the current Rs 2,000 crore, according to Dr U.D. Choubey, Chairman and Managing Director.
Speaking to newspersons, Dr Choubey said that the new projects would enhance GAIL's gas transportation capacity to 280 million standard cubic metres per day (mmscmd) from the current 140 mmscmd.

The eight pipelines to be laid by GAIL will form part of an integrated national gas grid in the country.

The Ministry of Petroleum and Natural Gas has approved GAIL's proposal to invite expressions of interest for five new natural gas pipelines in the country.

They are: Dadri-Bawana-Nangal, Chainsa-Gurgaon-Jhajjhar-Hissar, Jagdishpur-Haldia, Dabhol-Bangalore and Kochi-Kanjikkod-Bangalore-Mangalore. 'The five new pipelines will be build on common carrier principle and 33 per cent of the planned capacity would be offered to third parties,' he said.

In addition to these projects, GAIL will be laying three pipelines within the existing right of use (ROU) to augment the capacities of Dahej-Vijaipur pipeline (610 km), Vijaipur-Dadri pipeline (505 km) and Vijaipur-Auraiya-Jagdishpur pipeline (571 km). The carrying capacity of these three pipelines will be 74 mmscmd.

The total length of these pipelines along with the three capacity augmentation lines will be around 5,000 km.

These pipelines will be built by GAIL on ownership basis.

They are expected to be completed in two phases in 3-4 years. The company may consider tapping the market for raising funds to invest in the project, he said.

However, he refused to comment on the mechanism to be adopted to raise funds.

On gas sourcing, Dr Choubey said: 'The scenario of natural gas availability in the country is set for a major change in the coming years with a substantial increase in the availability of gas following the recent discoveries in the country, specially on the east coast - the Krishna Godavari and Mahanadi basins.'

He added: 'The projected availability of gas is expected to increase from the present around 95 mmsmcmd to around 170 mmscmd in two years.'

Apart from expected increase in availability from indigenous sources, Petronet LNG Ltd and Shell are importing LNG at their LNG regassification terminals on the west coast of India.

GAIL has signed an MoU with Reliance Industries Ltd (RIL) and ONGC for co-operation in the gas sector, including transportation of natural gas from the various gas sources of RIL and ONGC.

GAIL and Shell India have agreed to sharing of GAIL's pipeline interconnectivity with Hazira terminal for gas supplies in the country.

Besides, GAIL is in talks with Algeria for sourcing LNG.

The company would be looking for a long-term contract, he said.