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OMCs, EIL to join Gail's Surat-Paradip pipeline

Source : BUSINESS_STANDARD
Last Updated: Mon, Mar 18, 2013 03:45 hrs
A technician opens a pressure gas valve inside ONGC group gathering station on the outskirts of Ahmedabad

​The Rs 9,000-crore pipeline between Surat and Paradip has become a prized asset - even before state-run GAIL India formally begins work on it.

In addition to Indian Oil Corporation (IOC), in talks with GAIL since November, three state-run entities - Bharat Petroleum Corp Ltd (BPCL), Hindustan Petroleum Corp Ltd (HPCL) and Engineers India Ltd (EIL) - have evinced interest in buying stakes in the 1,550-km natural gas pipeline, from South Gujarat to the Odisha coast.



"With every player wanting a larger share, we have to try to give an equitable stake to everybody. We have not yet concluded the joint venture structure. We may do so in the next few months," said GAIL Chairman B C Tripathi.

A senior IOC official confirmed the company was in talks to buy up to 30 per cent stake in the pipeline. HPCL and EIL also confirmed approaching GAIL. Through equity investment, these companies plan to secure capacity for their own use. GAIL will hold 51 per cent stake.

Last April, GAIL secured rights to lay the pipeline, with a capacity to transport up to 60 million standard cubic metres a day (mscmd). GAIL will have 36 months to lay the pipeline and commission it. Tripathi said the plan was to complete the 36-inch pipeline by 2015-16. "We have already issued tenders and will meet the deadline," he said.

It is to originate from Mora in Gujarat and will cover Maharashtra and Chhattisgarh before it reaches Odisha. GAIL has a trunk pipeline network spanning around 11,000 km which it uses to market liquefied natural gas, both domestically produced and imported. It owns and operates 9,500 km of high pressure cross-country pipeline network, able to handle 175 mscmd. The company is in the process of significantly augmenting its pipeline network to reach every part of India. Within the next two to three years, GAIL will have a pan-India pipeline infrastructure spanning 14,500 km, to be able to handle volumes of 300 mscmd. It is investing $6 billion (Rs 32,500 crore) to create infrastructure.

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