Gail to invest Rs6,000 cr on 1,000 km pipelines in FY’11

Gail to invest Rs6,000 cr on 1,000 km pipelines in FY’11

Manesar: As part of plans to meet its target under the 11th Five-Year Plan of adding 5,000 km pipelines by 2013, state-run Gail (India) will invest about Rs6,000 crore in the next fiscal.

The company, which has earmarked a total of Rs28,000 crore for the five-year period, will lay 1,000 km of natural gas pipelines across the country in 2010-11.

“Next year we will lay and commission 1,000 km of pipelines at an investment of about 6,000 crore and this is our total capex," Gail (India) chairman and MD B C Tripathi said.

The company has commissioned 600 km of pipelines during the current fiscal under a capital expenditure plan of about Rs4,500 crore.

“Currently over 1,500 km of pipelines are under construction in Gujarat, Madhya Pradesh, Haryana, Rajasthan, Punjab and some other states... We have a target to lay 1,000-1,500 kilometre of pipelines every year," Tripathi said.

After completion of its expansion programme in 2013, the company’s total gas transportation capacity will more than double from the existing of about 160 MMSCMD. It currently owns and operates about 7,200 km of pipelines.

The company on Tuesday started supplying natural gas to the country’s largest car maker Maruti Suzuki India’s (MSI) Manesar plant. As per the agreement with MSI, Gail will supply 0.33 MMSCMD of R-LNG at the rate of $5.8 per mmBtu under a 10-year contract.

MSI is the first customer of Gail’s newly commissioned Chainsa-Jhajjar-Hissar pipeline, which has been constructed at an investment of Rs450 crore.

“So far we have signed 18 customers in Gurgaon-Neemrana- Manesar industrial area and all will be connected by April 15," Tripathi said, adding its customers include DLF, Honda and Kajaria Ceramics.

When asked about its performance this fiscal, Tripathi said the company will maintain a growth of 10-13% in its turnover. In 2008-09, Gail recorded a turnover of Rs23,776 crore.

He said the company is expecting its total subsidy burden during 2009-10 to touch Rs1,200 crore, including Rs400 crore in the fourth quarter.

Asked about its plans to purchase a cargo ship, Tripathi said, “We are thinking of buying one LNG cargo around June- July but it will depend on the demand from the customers. The capacity of the cargo will be around 80 MMSCMD."