The Hindu Business Line : GAIL to gain from Vizag underground gas storage facility

The reason: the gas distribution company expects the facility to hasten the breakeven schedule for its 600 km long Visakhapatnam to Hyderbad product pipeline, which is yet to achieve its throughput capacity.

Vishakapatnam , Dec. 5

The commissioning of the country's first underground LPG storage facility by SALPG Ltd at Visakhapatnam, which is scheduled for June 2007, is keenly awaited by GAIL. The reason: the gas distribution company expects the facility to hasten the breakeven schedule for its 600-km long Visakhapatnam to Hyderabad product pipeline, which is yet to achieve its throughput capacity.

SALPG, a joint venture between Hindustan Petroleum Corporation Ltd and Total Gas & Power India, a wholly owned subsidiary of French company Total, is setting up the mined cavern for LPG storage at a cost of Rs 333 crore, with a capacity to store 60,000 tonnes of the product.

Bolster utilisation

For GAIL, the cavern is expected to bolster the utilisation of its Vizag to Hyderabad product line and achieve its breakeven little earlier than projected, as a fair scoop of the LPG from the underground facility will run through its pipeline.

The GAIL pipeline is designed to carry an annual throughput of 1.13 million tonnes (which is to be increased to 1.3 million tonnes in the next phase), but last fiscal only 0.32 million tonnes of the product had gushed through it and this fiscal the throughput is likely to marginally increase to 0.5 million tonnes.

The gas distribution company has projected that it could achieve a breakeven for its Rs 500-crore pipeline only after it is able to carry a minimum annual throughput of 0.7 million tonnes, which it expects to achieve within the next two years, sources told Business Line. The company hopes that the HPCL-Total facility, coupled with other projects coming up in the region such as the 90,000-tonne Rajahmundry bottling unit, would bring forward the breakeven date.

Financial gains

Financially also, GAIL may benefit from the cavern project. It charges Rs 1.40 per km per tonne for carrying LPG through the pipeline - in other words, for transporting one tonne of LPG from Vizag to Hyderabad through the pipeline, it would cost the oil marketing company Rs 840.

The underground storage facility will also help in ensuring LPG flow through the pipeline during lean seasons, as the facility will be used by HPCL to store the product during a lean demand period and release it into the market when the demand flares up.

Engineering feat

For SALPG, the commissioning of the mined cavern will mean achieving an engineering triumph, which will add a new dimension to India's LPG storage capability. Imagine drilling a 162 mt shaft through hard rock and slowly blasting a gaping, gargantuan cavern underground that has a volume of 1.23 lakh cub mts. The work involved continuous underground blasting of rock, which was powdered and lifted up the shaft for disposal outside. Engineering major L&T is undertaking the cavern construction work.

What is unique about the project is that the internal walls of the storage facility are not subjected to concreting and the natural surface of the rocks deep within the vowels of earth would store the LPG. The stored product is prevented from escaping on the principle of hydraulic containment, whereby the cavern is located at such a depth that the water naturally present in the surrounding rock creates a counter pressure higher than the pressure of the stored product, preventing it from migrating. The water pressure in the rock can be enhanced artificially by special water supply systems (water curtains).

Mined caverns can be used for storing liquid or liquefied hydrocarbons, LPG at high pressure or low temperature and even gaseous hydrocarbons.

In this case, the main storage is located 162 meters below Mean Sea Level (MSL), with the deepest portion being 196 meters below MSL.

The underground construction involved excavation of a 4-mt diameter vertical shaft that extends up to a depth of 196 mts below MSL. At 144 mts below MSL, the operation shaft is connected to the water curtain gallery on the basis of the containment principle.

Further down, at 178 mts below MSL, the operation shaft is connected to the main storage zone by a 4.5 mt high tunnel, called the cavern operation shaft lower connection.

The main storage cavern comprises components such as upper shaft connection, east and west cavern main galleries and intermediate connection, which together give a volume of 1.23 lakh cub mts.

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