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GAIL plans FSRU project to revive Jagdishpur-Haldia pipeline

BS Reporter  |  Kolkata 

In order to revive the prospects of Rs 7,600-crore pipeline from Jagdishpur to Haldia, the state-run GAIL is planning to set up an imported liquefied natural gas (LNG) floating storage and regasification unit (FSRU) in East India which will see an investment of about Rs 3,000 crore in the region.

This will turn out to be a fresh lifeline for the city gas distribution project for which GAIL will sign a joint venture agreement with Hindustan Petroleum and the Greater Calcutta Gas Supply Corporation on November 17.

The pipeline project was facing rough weather as a Reliance Industries-led firm RGTIL not being able to set up the Kakinada-Haldia pipeline, to which the Jagdishpur to Haldia pipeline was dependent for KG-D6 gas. “Earlier, we were looking at Haldia and Digha in West Bengal for setting up this FSRU. It is difficult in Haldia because of the draft issues there and Digha is a cyclone prone area too. So, now we are considering Dhamra for this, initial-level studies are going on,” said a top company official here today.

FSRU is a floating storage and regasification system, which receives LNG from offloading LNG carriers, and the regasification system provides natural gas through pipeline to shore. The LNG for this will be sourced from foreign countries and converted into gas here only there by the dependency on KG gas and CBM blocks will be reduced. The city gas distribution network is also looking at sourcing gas from the coal bed methane blocks in Ranigunj, Durgapur and Asansol belt. In the proposed city gas JV, GAIL and Hindustan Petroleum will hold 37 per cent each, while Greater Calcutta Gas will hold 26 per cent equity with veto power.

Soon after the Mamata Banerjee government took charge in West Bengal, the firm’s chairman B C Tripathi met her and had promised an overall investment of Rs 21,000 crore over the next five years in laying new pipelines and building infrastructure.

The GAIL pipeline project was from Jagdishpur in Uttar Pradesh to Haldia, stretching 2050 Km to meet the demand of gas in West Bengal, Uttar Pradesh, Jharkhand and Bihar. The investment for this project in West Bengal alone was to be around Rs 3,000 crore as it covers about 820 km.

Recently, the Petroleum and Natural Gas Regulatory Board (PNGRB) has extended the dates to submit bids for the Durgapur-Kolkata pipeline to supply gas from coal-bed methane(CBM) blocks in Raniganj, siting reason that ONGC and GAIL doubted the potentiality of these blocks. Major players like Essar, Great Eastern Energy and ONGC have CBM blocks in the region and the pipeline was supposed to cover more than 160 km till Kolkata. With the project under trouble, FSRU seems to be the way out for the company.

But in an interview to the Business Standard recently, a top PNGRB official has said that both RGTIL and GAIL were given authorisation for the pipeline projects five years ago and may lose the projects, if they won’t apply for further extension by 2012. The state-run firm has already got consumers for gas from this pipeline — including Haldia Petrochemicals — who have expressed interest in the gas from here.

First Published: Sat, November 12 2011. 00:19 IST