Ministry wants expansion of GAIL’s pipeline network

Phalguna Jandhyala
Richa Mishra

New Delhi, Jan. 24 The Ministry of Chemicals and Fertilisers while seeking more gas for making Barauni, Bihar, into a petrochemical hub, has also asked for expansion of GAIL (India) Ltd’s pipeline network in the region. Official sources said the possibility of setting up a petrochemical hub at Barauni has been discussed with various stakeholders including Indian Oil Corporation Ltd (IOC), GAIL, and Engineers India Ltd.

“Based on the current availability of naphtha from the Barauni Refinery, it may not support a petrochemical complex in the region. But with further expansion, there is a possibility of fuel oils being available,” official sources said. The other alternative is availability of gas through pipelines for which GAIL has plans which could result in increased availability of natural gas in Bihar by 2010, sources told Business Line. This would facilitate the petrochemical hub.

In fact, the Minister for Chemicals and Fertilisers, Mr Ram Vilas Paswan, has written to the Petroleum Minister, Mr Murli Deora, on the issue. Mr Paswan is understood to have said that the proposed petrochemical complex may facilitate growth of both downstream upstream industries in the region.

The existing Barauni Refinery of IOC after de-bottlenecking, revamping, and expansion project has an installed capacity of six million metric tonne per annum (MMTPA). Barauni Refinery was initially designed to process low sulphur crude-oil (sweet crude) of Assam. With various revamps and expansion projects, the refinery has the capability of processing high-sulphur crude (sour crude), which is cheaper than low sulphur crude.

The gas transmission and marketing major, GAIL has plans to lay 5,000 km of new natural gas pipelines. The estimated investment on this would be Rs 18,000 crore. This will further strengthen GAIL’s position as a major gas transmission company and add to the existing network of over 6,700 km.

These new pipelines will be built by GAIL on ownership basis and are expected to be completed in two phases in the next three-four years. When these pipelines are commissioned, the capacity of GAIL network is expected to increase from 148 MMSCMD at present to around 300 MMSCMD.

The gas transmission and marketing major has plans to build the Jagdishpur-Haldia pipeline, which will be 876 km long and have facilities for bi-directional flow. The pipeline will pass through West Bengal, Jharkhand, Bihar and UP. The estimated investment for the pipeline will be Rs 2,000 crore.

(This article was published in the Business Line print edition dated January 25, 2008)
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