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GAIL to expand pipeline network in Tamil Nadu

By K. T. Jagannathan

CHENNAI, JUNE 21. Energy major GAIL (India) Ltd. is exploring possibilities for a role in the upcoming LNG terminal-cum-power project at Ennore here. Indicating this to this correspondent, the Chairman and Managing Director Proshanto Banerjee, said the consortium had indeed approached the Steel Authority of India Ltd. (SAIL) for participation in the project. He, however, declined to hazard any guess on the nature of GAIL participation in the project. To a question, Mr. Banerjee said GAIL could be an additional member of the consortium rather than stepping in for anybody.

It may be mentioned that the Dakshin Bharat Engery Consortium (DBEC), comprising Grasim Industries, CMS Energy, Unocal, Woodside Petroleum and Siemens Project Ventures, has been awarded the letter of intent (LoI) for the project after a global bidding.

In a freewheeling interaction with this correspondent here on Saturday last, Mr. Banerjee said GAIL proposed to add another 500 km to its existing 200-km-long pipeline network in Tamil Nadu. The marketing of natural gas through this pipeline, he said, was fetching GAIL a turnover of Rs. 300 crores annually in Tamil Nadu. The proposed pipeline would form part of the national gas grid envisaged by GAIL to link gas sources to markets.

Out of the proposed additional pipeline, work on the100 km long pipeline between offshore oil block PY1 and PPN (independent power producer) was on.

Besides the PY1-PPN line, GAIL was also planning pipelines between Coimbatore-Bangalore, Chennai-Bangalore and Chennai-Tiruchi-Tuticorin, involving another 400 km. Asked how soon these would fructify, Mr. Banerjee said these hinged on major gas links like the proposed Ennore terminal.

Fielding a range of questions, Mr. Banerjee said GAIL had identified an Italian consultant to prepare a detailed feasibility report (DFR) for its proposed petrochemical complex in Kerala. GAIL was considering a dual fuel (naphtha and gas) cracker there. He reckoned that any petrochemical complex should have a minimum capacity of half-a-millions tonne to be economically viable.

The company, he said, had established 8,000 km long telecom network in the North-West corridor. As the gas grid grew, GAIL would add another 8,000 km to its existing telecom network in five years. For GAIL, the capital expenditure was minimum (since it supplemented the pipeline network) and, hence, it could quote competitive tariffs on a marginal costing basis, he pointed out.

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