GAIL to join Srinagar to gas grid; Mumbai-Nagpur line by May 2023

Industry Outlook Team | Wednesday, 16 February 2022

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State-owned GAIL India plans to set a pipeline to Srinagar to take the environmentally friendly natural gas to the Kashmir Valley as it doubles down on efforts to expand infrastructure to helm the government vision of a gas-based economy, its chairman and managing director Manoj Jain said.

GAIL will by May 2023 complete a 700-km pipeline from Mumbai to Nagpur, enabling the flow of gas to central India and is on track to meeting the target of mid-2022 for completing major portions of the ambitious Urja Ganga project, bringing eastern India on the energy map, he said.

Gas pipelines are planned to take the fuel to the east and northeast regions and also to consumers in the south as part of the government push to raise the share of natural gas in India's energy basket to 15 per cent by 2030 from the current 6.7 per cent.

"We are in the process of getting an authorisation from the regulator (PNGRB) for the 425-km Gurudaspur (in Punjab) to Srinagar pipeline via Jammu," he said in an interview.

The project requires a viability gap funding from the government due to tough terrain and few customers at present. "We will start work on the project no sooner, this is decided," he said adding the project will be completed in 3-4 years.

Parallelly, the oil ministry has asked the Government of J&K to levy 0 per cent VAT on natural gas in the UT of J&K to keep the cost of the fuel down.

GAIL is also laying a 1,405 km pipeline from Mumbai to Jharsuguda (Odisha) via Nagpur and Raipur in Chhattisgarh. "The section up to Nagpur will be commissioned by May 2023," he said adding the remaining length will come in the next two years.

Presently, the total natural gas pipeline network in India is about 18,700 km, of which 12,500 km is operated by GAIL. GAIL, which sells two-thirds of all-natural gas sold in the country, will add 7,000 km of pipeline length in the next five years, Jain said.

Historically, most pipelines were set up in the west and the northern part of India, connecting gas fields in the Arabian Sea and import terminals

on the coast there to market en route. But now lines are being laid to connect east and west as well.

Pipeline projects at hand include the ambitious 2,655-km gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha (Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline also known as the 'Urja Ganga' project) as well as Kochi-Kootanad-Bangalore-Mangalore line; and Indradhanush North East Gas Grid.

Jain said the section connecting Bokaro and Angul in Odisha of the Urja Ganga will be completed by March.

The pipeline will be extended to Guwahati by laying an additional 729-km line from Barauni in Bihar. At Guwahati, it would interconnect with the upcoming 1,500-km 'Indradhanush' pipeline network conceived to operate in the northeast region by the public sector oil and gas majors.

GAIL will also lay a 750 km Srikakulam-Angul natural gas pipeline.

Barauni will be connected with Guwahati by June 2023, he said.

GAIL's push for infrastructure creation is in line with Prime Minister Narendra Modi's vision of creating a gas-based economy that is less reliant on polluting fuels for meeting its energy needs.

India currently consumes some 160 million standard cubic meters of gas per day and the consumption has to rise to 600 mmscmd to reach a 15 per cent share in the energy mix, and GAIL is laying the infrastructure to help achieve that.

The company is scaling up on liquefied natural gas (LNG) import capacity. Besides owning a part of Petronet LNG Ltd, India's biggest liquid gas importer, it also owns and operates a 5 million tonnes LNG import facility at Dabhol in Maharashtra.

"We have awarded the contract for construction of a breakwater at Dabhol to L&T and this should get completed in next year. The completion will help operate the Dabhol terminal at its full capacity of 5 million tonnes per annum," he said.

Currently, operations are restricted during monsoon months as high tide could damage ships carrying gas in its liquid form.

Also, the company has booked capacity at Adani Group's upcoming terminal at Dhamra in Odisha, Jain noted.

Domestic gas production meets just half of the country's demand and the rest has to be imported.

Besides pipelines, GAIL is also expanding city gas distribution (CGD) networks for retailing of CNG to automobiles and piped natural gas to household kitchens, he said, adding investments are also planned for the expansion of Pata petrochemical plant in Uttar Pradesh as well as converting a LPG recovery unit at Usar in Maharashtra into 5,00,000 tonnes Polypropylene plant.

GAIL is looking to put up 400 CNG stations and give out a record 10 lakh piped natural gas (PNG) connections to household kitchens in the next 3-5 years.

GAIL also has a small portfolio of 120 megawatts (MW) of wind and solar power generation capacity and plans to scale up capacity to 1 gigawatt (GW) at an investment of Rs 4,000 crore in the next 3-4 years.