GAIL's Rs. 3400 Crore pipeline project hits land block in Tamil Nadu.

Land acquisition issues and stiff opposition by the Tamil Nadu government has disrupted a key section of GAIL India's ambitious Rs. 3,400-crore Kochi-Kuttanad-Bangalore-Mangalore gas pipeline project.

The state-run firm has scrapped a supply contract worth Rs. 250 crore awarded to engineering firm Fabtech for building 300 km of the 900 km pipeline.

'We have scrapped the contract with Fabtech as of now, as currently the matter is in the Supreme Court, its resolution could take months and the contractor can claim damages which we want to avoid,' a senior GAIL executive told ET on the condition of anonymity.

The pipeline links Petronet LNG's new liquefied natural gas (LNG) terminal in Kochi with Bangalore. It will ultimately be connected with the natural gas grid and will pass through Coimbatore, Tirupur, Salem, Erode, Namakkal, Dharmapuri and Krishnagiri districts.

ET