Gas transmission major Gail (India) said it expects to generate additional revenue of around Rs 800 crore in the next financial year through transportation of gas to be produced from Reliance Industries’ deepwater D6 Block in the Krishna-Godavari Basin.
“On an average, we are expected to earn Rs 800 crore annually as transportation charges by transporting 40 mcmd (mln cu metres per day) of gas,” Gail Chairman and Managing Director UD Choubey said.
He said Gail’s current revenue from gas transportation is around Rs 1,600 crore annually. According to Choubey, Gail’s gas transportation revenue is likely to be doubled when gas production from the D6 Block touches its peak production of 80 mcmd by the end of 2010.
Reliance, which is the operator and holds 90 per cent interest in the D6 Block, is expected to start gas production by early March, with initial production pegged at around 10-20 mcmd.
Choubey said Reliance Industries is likely to raise output to 40 mcmd in “two to three months”.
“Gail is fully equipped to evacuate the first 40 mcmd of KG D6 gas. For another 40 mcmd, connectivity will be provided before gas production is increased,” he said.
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Choubey said if the company gets the marketing rights for D6 Block gas, Gail will earn an additional Rs 250 crore annually.
IGL Expansion
Choubey said Gail’s joint venture Indraprastha Gas (IGL), which started commercial sales of compressed natural gas in Greater Noida today, is expected to cover entire Noida and Greater Noida with CNG and piped natural gas in the next two to three years.
Indraprastha Gas Managing Director Rajesh Vedvyas said the company is planning to invest Rs 150-200 crore over the next two-three years on expanding its operations in Noida and Greater Noida.
“We have already invested around Rs 100 crore in building infrastructure in the two places and are drawing up plans to invest another Rs 150-200 crore,” Vedvyas said.
Initially, two CNG stations in Greater Noida will have the capacity to dispense up to 36,000 kg CNG a day.