Indian Oil, Idco pact on gas distribution network soon

The Odisha Industrial Infrastructure Development Corporation (Idco) is going to ink a pact with oil marketing major Indian Oil Corporation Ltd (IOCL) for development of gas distribution infrastructure in the state.

The state industries department has already readied the draft MoU to be signed between Idco and IOCL. The MoU is meant for natural gas infrastructure, city gas distribution and supply of gas to industries. Chief secretary B K Patnaik will chair a meeting in this connection on November 2.

As per the terms of the draft MoU, both entities would explore possible co-operation in the areas of total energy solutions, especially natural gas.

They would also strive towards development of natural gas infrastructure such as pipelines, city gas distribution network and LNG (liquefied natural gas) import terminals for ensuring availability of natural gas to all consumers in domestic, commercial, industrial and transport sectors after obtaining all due permissions from regulatory bodies.

To meet the demand of natural gas in the eastern region, IOCL has plans to set up a five million tonne per annum LNG terminal at Dhamara. IOCL has entered into a MoU with Dhamara Port Company Ltd (DPCL) for the project.

It may be noted that Petroleum and Natural Gas Regulatory Board (PNGRB), the upstream regulator for the petroleum sector, had identified nine locations in the state-Bhubaneswar, Khurda, Rourkela, Bhadrak, Jajpur, Anandpur, Baripada, Balasore and Kamakhyanagar for development of the city gas distribution network (CGD).

The CGD network would involve the distribution of compressed natural gas (CNG) and LNG for domestic and industrial use.

The distribution is expected to be done through two proposed pipelines - the 1,100-km Kakinada-Haldia pipeline of Reliance Industries Limited which will have a network of 434 km in Odisha and the 1700-km Surat-Paradip pipeline which would have a length of 400 km in the state.

While the Kakinada-Haldia pipeline is scheduled for commissioning by 2012, the Surat-Paradip pipeline is set to be completed by 2014. The combined cost of developing the two pipelines is around Rs 17,000 crore.

Meanwhile, the draft MoU to be signed between Idco and IOCL mandates that both signatories would jointly conduct techno-commercial studies and engage consultants, if necessary, based on demand potential and its spread across the state to arrive at optimal requirements of infrastructure such as terminals, pipelines and CGDs for sourcing, distribution and marketing of natural gas along with stage-wise development plans and feasible supply options on a long-term competitive basis.