CCEA approves ₹5,559-cr VGF for North-East gas grid project

Our Bureau New Delhi | Updated on January 08, 2020

Oil Minister Dharmendra Pradhan   -  PTI

The Cabinet Committee on Economic Affairs has approved a Capital Grant as the Viability Gap Funding to Indradhanush Gas Grid Ltd for setting up the North East Natural Gas Pipeline Grid.

This viability gap funding would be capped at 60 per cent of the estimated cost of ₹9,265 crore (including interest during construction) for the project. “The quantum of VGF would be capped at 60 per cent of the estimated project cost and would not be linked with upward capital cost variation,” an official statement said.


“A total of ₹5,559 crore has been earmarked as VGF. As per the plan, a 1,656-km gas pipeline grid would connect the eight states of the North-Eastern region, namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura,” Minister for Petroleum and Natural Gas, Dharmendra Pradhan said.

Indradhanush Gas Grid Ltd (IGGL) is a joint venture company of five central public sector enterprises, namely IndianOil, Oil and Natural Gas Corporation, GAIL, Oil India and Numaligarh Refinery Ltd. The joint venture was incorporated in August 2018 to develop and operate a natural gas pipeline grid in the North-East.

“The Capital Grant will provide natural gas supplies to various types of consumers, including Industrial, PNG (Domestic), and CNG (Transport), among others, and would help in substituting liquid fuels. The pipeline grid would ensure reliable and uninterrupted natural gas supplies to consumers who are otherwiseseverely affected due to various reasons in this part of the country,” the statement said.

“The possibility of installing bottling plants for LPG can be explored to reduce transportation costs. Uninterrupted supply of LPG and other value-added products can be ensured in the region, which will bring energy security to the people in the area,” the statement added.




Published on January 08, 2020

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