GAIL opposes Andhra firm's pipeline proposal

After Reliance Industries Ltd, public sector gas transportation company, GAIL, has opposed the state government-owned Andhra Pradesh Gas Infrastructure Corporation's (APGIC's) proposal for a new gas pipeline from Kakinada to Srikakulam.

GAIL has told the Petroleum and Natural Gas Regulatory Board (PNGRB) that the pipeline is a replication of GAIL’s proposal for providing connectivity from Kakinada to Visakhapatnam from its existing Krishna-Godavari (KG) basin pipeline network.

GAIL claimed its proposal was pending with the PNGRB. RIL had argued that gas availability for the pipeline is uncertain and will not contribute to the development of a national gas grid. “It is observed that the new pipeline is in the same route (as proposed by GAIL) and evacuating gas from the same source (KG basin) to serve the same market as identified by us,” GAIL said in its comments to PNGRB. It has also offered to complete the expansion in 9-12 months using the rights for user (RoU) of its existing Vizag-Secunderabad pipeline.

APGIC, a joint venture of AP Industrial Infrastructure Corporation and AP Genco, had issued an expression of interest (EoI) to build a pipeline from Kakinada to Srikakulam in Andhra Pradesh. The region forms a part of the 1,100 km Kakinada-Basudebpur-Howrah pipeline whose development was authorised in 2007 by the petroleum ministry to Reliance Gas Transportation Infrastructure Ltd (RGTIL), a RIL group company. This was before October 2007 when downstream petroleum sector regulator PNGRB came into being. RIL may end up losing the authorisation following the open house that has been called by the board sometime this week.

“We will take a decision on APGIC’s proposal after the open house this week. If the proposal is accepted, it may necessitate cancelling RIL’s authorisation,” said a board official. RIL has also opposed the proposal of APGIC to build another gas pipeline from Ennore to Nellore.

Commenting on the EoI of APGIC, RIL said the route of this pipeline is same as the Kaninada-Chennai pipeline for which authorisation had been granted to RGTIL.

“The proposed pipeline project shows gas to be sourced from the proposed LNG terminal at Ennore (by Indian Oil) and other domestic discoveries in east coast. The Ennore terminal has not made any progress,” RGTIL said in its comments to PNGRB.

Further, RIL said the proposed pipeline route barely caters to customers in Tamil Nadu and Andhra Pradesh and does not meet the concept of national gas grid which is at the base of the board’s objective. GAIL has also told the board that natural gas availability at Ennore needs to be established before proceeding with the EoI to provide a level-playing field to all the entities. The board will take up issues related to both these proposed pipelines in the open house this week.