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Kakinada pipeline feasible: Regulator

Rakteem Katakey  |  New Delhi 

But who gets to construct it will be decided through competitive bidding.
The has said that the proposed 1,600-km gas pipeline from Kakinanda to Dadri, which will be the longest in the country, is "prima facie feasible."
The pipeline, estimated to cost Rs 14,000 crore, has been proposed by Reliance Natural Resources Ltd (RNRL), an
According to the proposal, it will be used to feed gas from Kakinada in Andhra Pradesh to group company Reliance Energy Ltd's proposed 7,000-Mw power plant at Dadri in Uttar Pradesh.
"The project seems feasible as there is a market for gas along the route of the pipeline, besides the demand from the proposed Dadri power plant. However, according to the new draft pipeline policy, pipelines will be set up by companies that win the project in competitive bidding," said a member of the Petroleum and Natural Gas Regulatory Board (PNGRB).

The board is in the process of finalising the draft cross-country pipeline policy. An RNRL official declined to comment.


(in km)

Kakinada-Chennai-Bangalore-Mangalore 652
Kakinada-Bengal 1100
Kakinada-Dadri 1600
Major approved gas pipeline projects
(before the PNGRB was set up)
Dadri-Bawana-Nangal 610
Chainsa-Gurgaon-Jhajjar-Hissar 310
Jagdishpur-Haldia 876
Dabhol-Bangalore 730
Kochi-Kanjirkkod-Bangalore/Mangalore 840
Kakinada-Bharuch 1385
RNRL had earlier sought the board's approval for laying the pipeline to transport its share of gas from Reliance Industries' D6 block in the K-G basin to Dadri.
The board official said the pipeline would not carry gas only for the Dadri plant and added the company laying it would also be able to sell to customers along the route under the open access policy. "Pipelines will come up wherever there is a market," said the official.
The draft policy comes at a time when other companies, like RIL, are also planning to lay new pipelines.
While RIL is building a 1,400-km pipeline from Kakinada to Bharuch in Gujarat, it is planning to lay two other pipelines, from Kakinada to Mangalore in the south and from Kakinada to West Bengal in the east.
RIL had, in early 2006, before the Reliance group was split between the Ambani brothers, agreed to sell 28 million cubic metres per day (mcmd) of gas from the K-G basin to RNRL for $2.34 per million British thermal unit.
Petroleum Minister Murli Deora had, later that year, rejected the gas price agreement saying it was not arrived at through the arm's-length bidding process.
"We have to wait and see if gas is available for the pipeline. If that is tied up, we will call for competitive bidding according to the policy we have drawn up," said the board official.
He said since gas pipelines were a national property and were given a 10-year tax holiday in the last Budget, ensuring competition and transparency was a must.

First Published: Wed, November 21 2007. 00:00 IST