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Boosting Government’s Drive Towards A Gas-Based Economy

For the economic development of any country, energy is an essential ingredient. As one of the world’s fastest growing economies, India depends heavily on energy sources such as coal, oil and natural gas. But the share of natural gas in India’s energy mix is only 6 per cent despite it being one of the most environment- friendly fuels. However, this is about to change with the Government of India’s vision to make India a gas-based economy by increasing the share of natural gas in the energy mix to 15 per cent. As part of its dedicated efforts, the natural gas grid of the country is being expanded at a rapid pace while city gas distribution networks are being set up across the country.

This objective of the government is being aided by GAIL (India) Limited, the country’s premier natural gas company, which has been at the forefront of building the country’s natural gas pipeline infrastructure since its inception in 1984. It owns and operates a network of around 11,400 km of high pressure trunk pipelines and has a presence across the gas value chain.

B.C. Tripathi, Chairman & Managing Director of GAIL, says: “GAIL is playing a proactive role in developing the future gas economy of our country by building infrastructure and new market framework.”

Natural Gas Pipelines

Since 2008, GAIL has added over 5,000 km of natural gas pipelines. However, the scale of pipeline laying operations that GAIL is presently undertaking far surpasses any of the other transmission projects in its history. GAIL is working concurrently on multiple pipeline projects, aggregating over 5,400 km, including the Jagdishpur-Haldia & Bokaro-Dhamra Pipeline (JHBDPL), popularly known as the Pradhan Mantri Urja Ganga, and the Kochi-Kootanad-Bengaluru/Mangalore Pipeline. The total capex to be incurred on these projects will be ` 23,903 crore. The prestigious JHBDPL project will connect eastern and north-eastern India to the existing natural gas grid for the first time and will pass through eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha and Assam. The total length of the pipeline will be 3,383 km. Out of this, 110 km section from Phulpur to Varanasi has been successfully completed and commissioned.

The pipeline shall have two gas sources, one at Phulpur (Allahabad, UP) and the other at Dhamra RLNG Terminal (Odisha). The capacity of the pipeline network is 16 MMSCMD. The project is progressing in full swing and the complete first phase is scheduled for completion soon. This pipeline shall supply gas to fertilizer plants at Gorakhpur, Barauni and Sindri. These long closed plants are being revived by the Government of India to reduce the country’s dependence on fertilizer imports and will use environmentfriendly natural gas as feedstock. The Urja Ganga shall also supply gas to City Gas Distribution (CGD) networks in cities along the route. This trunk pipeline investment is likely to trigger cascading investments through infrastructure creation in City Gas Distribution, LNG terminal, fertilizer plant revival, etc amounting to over ` 50,000 crore in near future by various investors.

The construction of the Kochi- Kootanad-Bengaluru/Mangalore Pipeline (434 km section) is also in full swing and is expected to be completed this year. Apart from these, GAIL is working to de-bottleneck the upstream network of the JHBDPL project. For this, a parallel pipeline from Vijaipur to Auraiya and up to Phulpur (672 km) is under execution in phases.

City Gas Distribution

In the CGD arena, GAIL is a pioneer in the country and has a significant experience of over two decades and formidable market share in the segment on its own as well as through its subsidiary GAIL Gas and other joint ventures. GAIL is currently operating in 38 cities/geographical areas throughout India directly and through its eight joint ventures/ subsidiaries in the major cities of Delhi, Mumbai, Hyderabad, Bengaluru, Pune, Varanasi, Bhubaneswar, Cuttack, etc. These CGDs together cater to 24 lakh households out of the 43 lakh total PNG household connections in the country. Out of total 1,424 CNG stations in the country, GAIL group operates 915 CNG stations. Last year registered record addition of 5 lakh households and 120 CNG stations. GAIL has also been awarded six cities as part of Pradhan Mantri Urja Ganga project viz., Varanasi, Bhubaneswar, Cuttack, Patna, Ranchi and Jamshedpur. In addition, GAIL will execute a CGD project in Kolkata through a JV between GAIL and a Government of West Bengal company.

In order to ensure steady supply of natural gas in the country, GAIL has tied up with both domestic and international sources. Through long-term contracts, GAIL has created geographical and indexation diversification of liquefied natural gas (LNG) supplies. Linkage to different indices in its LNG portfolio has mitigated risk and has allowed GAIL to offer stable and competitive pricing to its consumers. GAIL has hired its first LNG vessel “Meridian Spirit” on time charter basis to transport US volumes to India. It also has plans to hire more ships in the future based on the requirement and will continue expanding its network to help transform India into a gas-based economy.

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