Bangalore: The Petroleum and Natural Gas Regulatory Board (PNGRB) has approved the 1,104km Kochi-Bangalore natural gas pipeline. The project, first mooted by GAIL (India) Ltd in July 2007, got the final nod from the regulator on 31 May.
The oil regulator has approved the Kochi-Koottanad-Bangalore-Mangalore pipeline with a common carrier capacity of 4 million metric standard cubic metre per day (mmscmd), according to the approval, which has been reviewed by Mint.
GAIL has agreed to build the pipeline and commission it by March 2013 for around Rs 3,500 crore. The pipeline will pass through the districts of Ernakulam, Thrissur, Palakkad, Malappuram, Kozhikode, Kannur and Kasargod in Kerala; Coimbatore, Erode, Salem and Dharmapuri in Tamil Nadu; and Dakshin Kannada, Chamarajanagar, Mandya and Bangalore in Karnataka.
Mint’s Shamsheer Yousaf talks about the 1,104 kilometre Kochi-Bangalore natural gas pipeline which was approved by The Petroleum and Natural Gas Regulatory Board (PNGRB)
An email sent to GAIL on Tuesday did not elicit any response till press time.
The approval comes as GAIL is set to complete the construction of the 1,400km gas pipeline between Dabhol and Bangalore. According to two GAIL officials, who spoke on condition of anonymity, the pipeline had already reached Bidadi on the outskirts of Bangalore, and should be ready by August. One of the officials said pipelines had been laid to supply gas to the Toyota-Kirloskar plant and the Britannia Industries Ltd factory at Bidadi in a few months.
GAIL has also signed an agreement to supply gas for a 40 megawatts (MW) captive power plant at the International Tech Park at Whitefield, Bangalore.
The Karnataka government has also invited tenders for the development of three 700MW gas-based power plants along the pipeline route in Mundargi, Gadag and Davangere.
“There is a lot of interest from private companies to set up merchant power plants,” said M. Naveen Kumar, managing director, Power Co. of Karnataka Ltd. “At the recent Global Investors Meet (held in Bangalore on 7-8 June), we have received interest from around 53 firms to set up merchant power plants.”
Once the pipeline is commissioned, GAIL will import gas for interested entities.
“One hundred percent of the gas supplied through the Dabhol-Bangalore and Bangalore-Kochi pipelines will be imported,” said the first GAIL official quoted above. The gas will be imported from various countries including Australia, Qatar, and the US, the official added.
With imported liquefied natural gas costing twice as much as indigenous LNG (liquefied natural gas), the viability of these power plants could come under question unless the state or central government raises the price of power purchases.
GAIL has established a regasified LNG plant at Dabhol to convert imported LNG to natural gas at a cost of Rs 4,000 crore, the official said. A similar plant will also be built in Kochi, the official added.
Additionally, once the Dabhol-Bangalore gas pipeline is commissioned, a city-wide gas distribution service that will supply piped gas to households is also likely to be implemented at Bangalore, just as in Mumbai and New Delhi.
According to Karnataka government officials, the oil regulator will notify Bangalore for city-wide distribution service soon, and companies will be allowed to bid for providing the service. The officials declined to be named.
The Karnataka State Industrial and Infrastructure Development Corp. Ltd and GAIL have formed a joint venture to bid for the gas-supply project.