GAIL to invest Rs 15,000 cr in new pipelines by 2013

GAIL India, the country’s biggest gas marketing company, will invest about Rs 15,000 crore over the next two-three years in expanding its pipeline network to connect consumption centres.

Addressing a meet organised by the PHD Chamber of Commerce and Industry here, company Chairman and Managing Director B C Tripathi said his company was laying new pipelines to connect cities in the Northern states of Uttar Pradesh, Uttarakhand, Punjab and Haryana.

“Gas demand in northern India is expected to grow at the rate of 20-25 per cent over the next two-three years. To meet this demand, we are investing Rs 15,000 crore in laying new lines,” he said.

GAIL has planned pipelines to connect cities like Meerut, Saharanpur and Moradabad in UP, Dehradun in Uttarakhand, Bathinda and Nangal in Punjab and Panipat, Hissar and Gurgaon in Haryana by 2013. In addition, GAIL is expanding its 10,700 km of cross-country pipeline network. It is laying 5,000 km of pipeline to connect gas sources on the western coast to consumption centres in the north by 2013.

Of this, about 1,000 km of pipelines would be commissioned by year-end and 1,500 km would be added every year over the next two years. GAIL is also laying pipelines to connect to Bangalore, Mangalore and Kochi in next the three-four years.

Tripathi said the share of natural gas in the energy basket will rise to 12 per cent by 2012-13 from the current 10 per cent. Domestic gas production, he said, will rise to 170-175 million standard cubic metres a day (mscmd) in the next four-five years from 135 mscmd currently after new fields of companies like Oil and Natural Gas Corporation and Gujarat State Petroleum Corporation go on stream.

He, however, cautioned that future gas supplies may not come cheap. Liquefied natural gas (LNG) from international suppliers like Qatar was available at no less than 14-15 per cent of crude oil price.

At prevailing crude oil price of $80-85 per barrel, this translates into a gas price of around $10 per barrel, more than double the rate at which Reliance Industries sells gas from its eastern offshore KG-D6 fields.

“I don’t think that prices are going to come into as demand is bound to go up with the revival of world economy,” he said.

GAIL, EIL eye tie-up for distributing city gas
Meanwhile the State-run gas utility today said it was in talks with Engineers India Ltd (EIL) to set up a joint venture (JV) to sell compressed natural gas (CNG) to automobiles and piped natural gas to households in cities. “EIL has a long association with GAIL. We are interested in having them as partners even in city gas distribution (CGD) projects,” GAIL CMD B C Tripathi told reporters here.

The two companies are discussing bidding jointly for CGD projects in cities that would be put on offer by the sector regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), in the future.