India's GAIL plans big gas trunk line

Gas Authority of India Ltd. (GAIL) plans to lay a natural gas trunk pipeline from Hazira in Gujarat to Bijapur, central India, at a cost of about 35 billion rupees ($825 million). The proposal has been identified as a core project that needs to be implemented quickly, given change under way in India's petroleum sector.

Aug. 24, 1998

2 min read

Gas Authority of India Ltd. (GAIL) plans to lay a natural gas trunk pipeline from Hazira in Gujarat to Bijapur, central India, at a cost of about 35 billion rupees ($825 million).

The proposal has been identified as a core project that needs to be implemented quickly, given change under way in India's petroleum sector.

The petroleum sector in India has been partly deregulated, and pipe- lines-until recently a monopoly of state-owned GAIL-have been opened up to private investment. The gas major needs to offer its customers a more efficient mode of gas transportation, if it is to hold its own in the liberalized environment.

The new Hazira-Bijapur pipeline will mainly serve major gas buyers in western India, likely among them National Thermal Power Corp., Gujarat Torrent, Iffco, and Indo-Gulf Fertilizers. GAIL also hopes to serve residential consumers in Hazira.

Several gas import projects are coming up in Gujarat as well, so GAIL is assured of some captive consumers. However, because a large part of the gas would have to be sold outside the state, the pipeline would be a vital link for transportation. GAIL would also be able to handle additional supplies-as much as 700 MMcfd-that the group led by Enron Corp. would produce from the offshore Tapti gas fields.

Company sources said the proposed pipeline is part of a plan involving the setting up of pipeline links to potential gas production or import sites.

One such project, which GAIL recently completed, is the expansion of the HBJ pipeline system capacity to 1.17 bcfd from 637 MMcfd, with the construction of a pipeline from Vijaipur to Dadri. GAIL is also developing long-term strategic plans and diversification. While concentrating on gas as its mainstay, it is planning to reorient itself to diversify into other sectors that offer some synergies. These would include producing, transmitting, processing, and utilizing gas.