Govt may choose PPP mode for gas highways

Idea is to cover the entire country with a gas pipeline network.

The government may consider a public-private partnership (PPP) mode for setting up national gas highways to ensure distribution across the country. It is likely to set up a national gas highway development authority on the lines of the National Highways Authority of India.

The Ministry of Petroleum and Natural Gas will seek an in-principle approval from the Cabinet for setting up the authority. It has circulated a draft note to seek comments from other ministries.

“The proposed authority will undertake issues related to planning and funding of the gas highway. The idea is to cover the entire country with a pipeline network, so that as and when gas becomes available either through imports or domestic sources, it can be distributed. Various modes of funding are being looked at, including PPP, government grant and external aid,” said a ministry official.

The gas availability will ensure rapid industrialisation and help the growth of small and large units, apart from connecting households to piped gas supply.

With the recent find of natural gas in the Krishna-Godavari basin in the eastern offshore of the country, indigenous production is set to double, with natural gas emerging as an important source of energy. LNG infrastructure in the country is also being expanded. Current domestic gas production is estimated at 141.5 million standard cubic metres a day (mscmd).

At present, the bulk of gas consumption is accounted for by the western and northern states, while the eastern and southern states were lagging due to low gas pipeline density. The purpose behind expanding the existing pipeline network is to bring down the considerable inter-state disparity in gas consumption.

Unviable routes where the private sector might not be interested in laying pipeline would be taken up under the gas highway plan, said an official.

In his Budget speech this year, Finance Minister Pranab Mukherjee said the government proposes to develop a blueprint for long-distance gas highways, leading to a national grid to facilitate transportation of gas across the country.

While India’s current oil production is around 660,000 barrels a day, gas output has touched 676,000 barrels of oil equivalent a day. With development of more fields by Reliance Industries, ONGC and GSPC, the share of natural gas in the domestic energy basket would continue to rise and the country will gradually move to a gas economy.

In 2008-09, gas production at 32.481 bcm (214 million barrels of oil equivalent) in the country was marginally less than the oil production at 33.507 million tonnes (245 million barrels).