Banerjee: Well-connected

Mumbai, Oct. 9: Gail (India) Ltd today unveiled an ambitious Rs 20,000 crore national gas grid plan that will facilitate movement of gas across the country. The grid will involve around 7900 km of pipeline network.

The company is gearing up to make the project a success. According to company chairman Prashanto Banerjee, Gail is in talks with Reliance Industries Ltd (RIL) to use this network to transport the gas produced by the latter in the Krishna Godavari basin at a competitive tariff.

“Gail will offer attractive terms and the grid will open up the entire market to producers,” Banerjee added.

Gail wants to adopt an international mode where development of a national gas grid is the responsibility of a ‘national’ company. RIL had also announced its intention of setting up a pipeline to transport its Krishna Godavari basin gas from Kakinada to Goa.

Banerjee said duplication of pipeline infrastructure would hurt the companies and lead to sub-optimal utilisation of infrastructure.

Divulging the details of the proposed grid here today, executive director business development and joint ventures Rajiv Khanna said the grid would connect major consumption centres with gas fields, liquefied natural gas (LNG) terminals and other cross-border gas sourcing points.

Gail is implementing the gas grid in a time-bound manner. The grid would cover Dahej-Vijaipur, Dahej-Uran-Pune, Kakinada-Hyderabad-Pune, Kakinada-Calcutta, Kakinada-Chennai, Chennai-Bangalore, Dabhol-Bangalore-Coimbatore-Kochi and Calcutta-Jagdishpur.

Khanna said new gas discoveries have improved the domestic gas supply scenario considerably, particularly in the eastern offshore Krishna Godavari basin. While a large number of New Exploration Licensing Policy blocks have reached the exploratory drilling stage, work has also progressed on coal-bed methane blocks. LNG import is also slated to commence in the first quarter of 2004.

Though a separate company is not being planned for the national grid, the investment outlay will be met by internal resources and borrowings from markets, including banks.

Banerjee said Gail is also contemplating ‘unbundling’ its gas trading activity. This may include spinning off this business into a separate listed company at a later stage. Gail, which will be the parent company in such an event, will be involved in gas transmission and petrochem.