Gas for all
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04/10/2009
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Business India (Mumbai)
The project of countrywide piped gas is UPA's first Big Idea
Under flak for its handling of the kg Basin gas controversy and its inability to get a fix on petrol prices through deregulation, the much-maligned petroleum and natural gas ministry now hopes to earn rookie points from the public by setting the stage for a countrywide pipeline network that will supply compressed natural gas (cng) and piped gas for transportation and domestic use. The project, which will ensure
availability of gas to customers across the country at affordable rates, is being touted as one of the possible 'Big Ideas' of upa-II with an in-built outreach to the aam aadmi.
"We are in the process of finalising a vision where even two-wheelers in semi-urban areas and small townships will run on cng, and piped gas has to be carried to every nook and corner of the country for domestic use through a massive network of pipelines," says petroleum and natural gas secretary R.S. Pandey. Political sources say that the Rs30,000 crore project should be fully operational by 2014, when the next Lok Sabha election is due, running along the national highways in 15 states. A countrywide gas transportation infra-
structure along the national highways will also be faster to implement, as the Centre already owns the land and will not face problems in getting right of use (RoU). All that is required is coordination with the ministry of road transport and highways.
The 6,000-km network will be
dovetailed into the existing gas pipelines being run by
five companies, including gail and Reliance, which has constructed the East-West pipeline connecting Kakinada in Andhra Pradesh to Baruch in Gujarat.
Right now, it is a toss-up whether the project should be by an apex implementation agency, along the lines of the National Highways Authority of India (nhai), which will lay natural gas pipelines along the national highways, or it should be handed over to an experienced body like gail. The state-owned gas company currently owns and runs 7,000 km of network and is building another 500 km of pipelines, gail's last mega project was the Hazira-Vijaypur-Jagdishpur trunk pipeline connecting Gujarat to Uttar Pradesh.
A third option is to have an administrative board with various stakeholders. Domestic and foreign companies could take up the job of building 1,500 km of sub-routes.
Technically, the idea stems from the fact that the existing pipeline infrastructure is insufficient to handle the country's growing natural gas production, which is expected to double in the next six months. Besides, a large portion of the 128 mscmd gas currently available is being consumed in West and North India. The idea is to extend the gas corridors to the southern and eastern parts, apart from central India, and thus bring down the inter-state disparity in gas consumption.
The government may fund the proposed infrastructure project through budgetary allocations. It may also access soft loans from multilateral agencies such as the World Bank. The government may levy a nominal $0.20 (around Rsl0) per million British thermal unit cess on domestically produced natural gas. It will garner Rs3,000 crore annually from the cess that can help build 500-600 km of gas pipeline. Once created, the infrastructure will belong to the nation and the consumer will not have to bear the burden of the capital cost. Consumers will only pay operational charges, which will be nominal.
Driven by Murli Deora, the petroleum and natural gas ministry is said to be burning midnight oil on the plan, and the roadmap for implementation is expected to be finalised soon. In fact, Deora wanted the plan to be a part of his ministry's 100-day agenda and had indicated this at a meeting of ceos of public sector oil companies shortly after he re-assumed charge when the upa returned to power.
The idea of 'national gas highways' was first mooted by Pandey at an industry meeting. "A nationwide gas transportation infrastructure is a must for the balanced growth of the economy. Gas transporters are interested in laying pipelines in industrialised regions only for better returns. But the government can't ignore growth of other regions, especially when natural gas is the fuel for future," he had said.