GSPC-OMCs set to win Rs 18,000-cr of gas pipeline bids

In a field so far dominated by GAIL (India), a consortium led by Gujarat State Petroleum Corporation (GSPC) and also comprising the three central government-owned oil marketing companies — Indian Oil, Hindustan Petroleum and Bharat Petroleum — is set to get authorisation for three major gas line projects worth Rs 18,000 crore.

GSPC owns 52 per cent in the pipeline consortium and IOC 26 per cent; HPCL and BPCL have 11 per cent each. The consortium is ahead of the other bidders (GAIL-Engineers India and Adani-Welspun) in all the three projects put up for bidding.

“The consortium is the front-runner in all the three and has outbid GAIL in two projects. We are not declaring the official winner, since an interim order of the Supreme Court has prevented us from passing final decisions. We have requested the court to modify its order, since the government has notified Section 16 of the Petroleum and Natural Gas Regulatory Board (PNGRB) Act. The matter will come up before the apex court on November 8,” a PNGRB official said. The section authorises the regulator to lay, build, operate or expand a city or local natural gas distribution network.

PNGRB had invited bids for three trunk pipelines — Mallavaram (near Kakinada in Andhra Pradesh)-Bhopal-Bhilwara (Rajasthan)-Vijaipur (near Guna in Madhya Pradesh; Mehsana (Gujarat)-Bhatinda (Punjab); and, Bhatinda-Jammu. A GAIL-EIL consortium and the GSPC-OMCs one had bid for the first pipeline. The Adani-Welspun combine and GSPC-OMCs had bid for the second pipeline. While GAIL-EIL, Adani-Welspun and GSPC-OMCs had bid for the third pipeline.

So far, the gas pipeline business was dominated by GAIL and Reliance Industries Ltd.

PNGRB has been mandated by the government to rapidly expand domestic gas pipeline networks. At present, the bulk of gas consumption is accounted for by the western and northern states, while the eastern and southern states are lagging due to low pipeline density. The government is keen to expand the network to bring down the considerable inter-state disparity in gas consumption.