Gujarat State Petroleum Corporation (GSPC) has initiated negotiations with Reliance Industries (RIL) for a swap arrangement to transport the Krishna-Godavari (KG) basin gas from the east coast to west coast states. |
Under the proposed arrangement, GSPC has requested RIL to accommodate natural gas it has discovered in the KG basin through RIL's proposed pipeline connecting Kakinada in Andhra Pradesh on the east coast with Uran in Maharashtra on the west coast of the country. |
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In exchange, GSPC has offered RIL to transport its gas from Uran in Maharashtra to its Jamnagar-based refinery located in the north west of Gujarat. |
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Gujarat government official told Business Standard, "We have approached RIL to enter swap arrangement as it's a win-win situation for both the sides." |
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RIL sources also confirmed that talks are going on between the two sides. They further said, "If talks do not materialise, we may consider laying down a pipeline on our own to take gas from Uran to Jamnagar refinery." |
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RIL is laying down a 40-inch pipeline between Kakinada and Uran, which is capable of transporting gas discovered by Reliance in the KG basin along with GSPC's gas. |
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Both GSPC and RIL discovered gas in adjoining blocks and are expected to have landfall point just next to each other to facilitate transport of gas. RIL has landfall point at Gadimoga village "� about 30 km south of Kakinada. |
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To bring out gas from Dhirubhai discoveries of D6 block and pump it to the Kakinada-Uran pipeline, Reliance is planning to set up sub-sea controls to connect 18 sub-sea wells and six manifolds. |
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Two 24-inch pipelines will ship gas to the offshore shallow water central receiving platform from where two shallow water pipelines of the same diameter will each transport gas to its proposed onshore terminal at Gadimoga village, where work is already underway. |
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RIL has issued tenders for the pipeline work and is expected to commission it in early or mid-2008, according to market sources. |
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Gujarat State Petronet (GSPL), a GSPC group company, will pick up the KG basin gas from Vapi, which is located near southern most border of Gujarat and close to Uran where RIL will offload its KG basin gas. |
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GSPL, which transports 13 mcm of gas within the state, will then transport RIL gas to its Jamnagar refinery, where RIL requires gas mainly for petrochemical cracker and as feedstock for energy requirement of existing 33 mt-a-year refinery and the newly proposed one with the same capacity in SEZ. |
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GSPL will also transport the GSPC gas through the same network to GSPC's customers located at various places en route the pipeline across the state. |
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The total installed capacity of GSPL's pipeline is 40 mcm, which is enough to transport the KG gas of RIL as well as GSPC, sources said. Interestingly, GSPL has kept 30-inch diameter of the pipeline at Vapi to receive RIL gas. |
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The move is expected to reduce the cost of transportation of gas for the distance of over 1,400 km, from the east coast KG basin to the west coast where there is large concentration of utility and petrochemical capacity of the country. |
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