GAIL wins rights to lay Surat-Paradip pipeline

GAIL beat Gujarat State Petronet Ltd (GSPL) to win the right to lay the pipeline when oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) opened bids here today, sources privy to the development said.

The PSU bid an astonishingly low pipeline tariff of Rs 0.01 (one paisa) per million British thermal unit to bag the project.

The aggressive bidding by GAIL followed the state-owned firm losing bid for the previous three major pipelines - Mehsana-Bhatinda, Mallavaram-Bhopal-Bhilwara and Panipat-Jammu-Srinagar, to GSPL.

The bi-directional pipeline would have a capacity to transport up to 60 million standard cubic meters per day of gas.

The 36-inch pipeline would cost Rs 5,500 crore, sources said, adding this will be the first pipeline in the country originating and terminating at a port.

The pipeline is to originate from Mora in Gujarat which is a major node/terminal of GSPL gas grid pipeline network. The pipeline was to end at the Indian Oil Corp's under-construction 15 million tons refinery at Paradip.

The pipeline is to pass through Jalgaon, Nagpur, Raipur and Bhuvaneshwar.
Liquefied natural gas (LNG) imported at the proposed Mundra terminal, Petronet LNG Ltd's Dahej terminal or Royal Dutch Shell's Hazira import facility are possible sources of gas, which can be transported through the pipeline right up to the east coast.

The pipeline will traverse 1,500 km, with the main line and 124 km spur lines covering the states of Gujarat, Maharashtra, Chhattisgarh and Orissa.

Sources said while the pipeline may primarily transport imported LNG, the line would run almost parallel to Reliance's East-West pipeline (from Kakinada in Andhra Pradesh to Baruch in Gujarat). This pipeline transports gas from Reliance Industries' eastern offshore KG-D6 fields to customers on the West.

GAIL has a trunk pipeline network spanning around 11,000 km and markets bulk of the domestically produced and imported LNG in the country.It is laying another 8,000 km of pipelines across the country.