Cash pledge to extend city gas service

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  • Published 24.03.07

Mumbai, March 24: The Centre will invest Rs 10,000-12,000 crore in the next two years to extend the piped gas facility to 28 more cities, including Calcutta, Chennai, Hyderabad, Bangalore and Pune.

Nearly five lakh households in Mumbai and Delhi now get piped gas. According to Union minister of petroleum and natural gas Murli Deora, once the project is complete, two crore households will get piped gas in kitchens.

Addressing newspersons here today on the development of city gas projects in India, Deora said the target is to expand the distribution network to more than 200 cities.

This will release over 16 crore LPG cylinders that can be diverted to urban and rural areas.

At present, only 4 per cent of the natural gas in the country is utilised for piped gas.

This was expected to go up to 40 per cent once the projects are completed.

Companies are already busy building pipeline networks in the country. It is estimated that around Rs 60,000 crore will be spent on laying trunk gas pipelines.

Reliance Industries Ltd (RIL) is laying a 1,400-km pipeline from Kakinada to Ahmedabad to ferry gas from the east coast to the west. GAIL India is also planning to lay new pipelines.

GAIL chairman U.D. Choubey said pipelines would be built from Jagdishpur to Haldia, Kochi to Mangalore, Dadri to Nangal, Chainsa to Hissar and Dabhol to Bangalore to make natural gas available to consumers in new areas.

According to Deora, all piped gas distribution projects will be public-private partnership ventures though they will be run by private entities.

The structure will be such that while GAIL India will hold 22.5 per cent, equal stake will be held by an oil marketing company and 5 per cent will be held by the state government.

The rest can be held by private parties that can include banks and financial institutions.

GAIL eyes LNG terminal

GAIL is keen on gaining control over the five-million-tonne liquefied natural gas (LNG) terminal of the Ratnagiri (Dabhol) power project. The company wants “the first right of refusal” on the terminal, Choubey said.

The GAIL board will meet shortly on the issue. The terminal requires an additional Rs 500 crore for its completion.

Earlier reports had said that several players, including Reliance Industries, had evinced interest in acquiring the terminal.

“The GAIL board is meeting next week. We should be given the first right of refusal in the event of a hive-off,” Choubey said.

He added that though no decision has been taken so far, only the board can take a view as it involves an investment of Rs 500 crore.