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GAIL to invest Rs28,000 cr in new pipelines

GAIL to invest Rs28,000 cr in new pipelines
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First Published: Thu, Jun 21 2007. 06 47 PM IST
Updated: Thu, Jun 21 2007. 06 47 PM IST
PTI
Kolkata: State-run gas utility GAIL (India) Ltd would invest Rs28,000 crore ($6.9 billion) for laying seven pipelines across the country by 2011, chairman and managing director of the company U D Choubey said on 21 June.
Choubey told reporters here the government had given in-principle clearances for seven pipelines, which would increase its network from 6,400km to 11,500km.
He said the project would be implemented in two phases. While the first phase entailed an investment of Rs10,000 crore and would be completed by 2009, the second phase would see an investment of Rs18,000 crore by 2011.
On completion of the two phases, gas transportation capacity of GAIL would increase from 140 million cubic metres a day to 220 million cubic metres.
Choubey said these investments would be funded largely from borrowings, while internal accruals would also be used for part-financing the project.
In the second phase, GAIL would lay the 890km long Jagdishpur-Haldia pipeline. This pipeline would serve the industrial belts of Gorakhpur, Barauni, Durgapur and Haldia.
Choubey said by 2011, GAIL’s revenue would increase to Rs45,000 crore ($11 billion) from the present level of Rs16,000 crore.
Regarding sourcing of gas, Choubey said GAIL had entered into agreements with ONGC, Reliance Industries and Shell Hazira for supplies from eastern coast and Hazira terminal.
He said since laying of pipelines was a capital intensive job, it was important to source gas for this purpose.
To a query, Choubey said GAIL was examining the issue of selling 2.5% stake held in ONGC.
“Selling the stake would definitely help in supporting the capital expenditure plan of the company, but we are examining it,” he said.
He said GAIL was also entering the petrochemicals, exploration & production (E&P) and CBM extraction sectors.
The company holds 73% market share in gas marketing in the country.
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First Published: Thu, Jun 21 2007. 06 47 PM IST