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GAIL readies Rs 1 lakh crore war chest for gas grid, petrochemical expansion
State-run GAIL has lined up a war chest of over Rs 1 lakh crore for expanding petrochemical capacity and network of gas pipelines — the latter with the objective of widening the reach of clean-burning fuel to help cities across the country breathe easy and reduce the economy’s carbon footprint.
“We have planned a capital expenditure of Rs 45,000 to Rs 50,000 crore on laying pipelines, Rs 10,000 crore on petrochemical capacity expansion and another Rs 40,000 crore for city gas distribution (CGD, or CNG and PNG services) business,” the company’s new chairman Manoj Jain said on Monday. The investment will be spread over five years.
The utility is adding 7,000 km of pipelines to its 12,160-km network to integrate the eastern, northeastern and southern regions into the country’s gas grid to open doors for CGD services. This is part of the government’s bid to raise the share of natural gas in India’s energy basket to 15 per cent by 2030 from over 6 per cent, Jain said. GAIL currently markets two-thirds of the 160 mcmd (million cubic meters per day) of gas consumed daily. The expanded infrastructure is aimed at widening the gas market.
Since domestic production meets 50 per cent of the demand, rising at about 5 per cent, GAIL is also investing in expanding capacity to import gas in ships — or LNG. “We have awarded the contract for construction of a breakwater at Dabhol (LNG import terminal in Maharashtra) to L&T and this should get completed in two-and-half-years. The completion will help operate the terminal at its full capacity of 5 million tonnes per annum,” Jain said.
Pipeline projects at hand include the ambitious Urja Ganga project to take gas to Bihar, West Bengal, Odisha, and Jharkhand as well as Kochi-Kootanad-Bangalore-Mangalore line; and Indradhanush North East Gas Grid.
Besides pipelines, GAIL is also expanding city gas distribution (CGD) networks for retailing of CNG to automobiles and piped natural gas to household kitchens, he said, adding investments are also planned for the expansion of Pata petrochemical plant in UP as well as converting a LPG recovery unit at Usar in Maharashtra into 5,00,000 tonnes Polypropylene plant.
GAIL is looking to put up 400 CNG stations and give out a record 10 lakh piped natural gas (PNG) connections to household kitchens in the next 3-5 years.
The company is building a 2,655-km gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha. Jagdishpur-Haldia & Bokaro-Dhamra Natural Gas Pipeline (JHBDPL) project, also known as the ‘Pradhan Mantri Urja Ganga’ project, was inaugurated by the Prime Minister in July 2015.
GAIL has commenced city gas operations in all the six geographical areas (GAs), including in Patna and Bhubaneshwar, that was awarded to it along the Urja Ganga route, Jain said.
The pipeline will be extended to Guwahati by laying an additional 750-km line. At Guwahati, it would interconnect with the upcoming 1,500-km ‘Indradhanush’ pipeline network conceived to operate in the northeast region by the public sector oil and gas majors.
GAIL will also lay a 600 km Srikakulam-Angul natural gas pipeline.
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