GSPL to invest Rs 800 crore for distribution expansion

Plans to add 450 kms of gas pipeline

Gujarat State Petronet Ltd (GSPL), the gas transportation arm of Government of Gujarat enterprise, Gujarat State Petroleum Corporation Ltd (GSPCL), will be investing more than Rs 800 crore to develop 450 kms of gas pipeline in the State during next one year even as GSPL has invited pre-qualification applications from pipeline construction companies this week.

GSPL which has already 360 kms of gas pipeline in operations and recently connected Ahmedabad also with this gas grid, now planning to cater to the gas needs for the industrial units based in the Saurashtra and adjoining regions under this expansion programme.

"As we expect to finalise new pipeline construction tender process in next two-three months, one year from the date of awarding the contract, we expect to reach gas in various gas-starved areas of Saurashtra region, specially in Morbi, the hub of tiles industry and also in Rajkot, known internationally for its diesel engine industry.

"GSPL will have to incur an expenses of at least Rs 800 crore for the two projects, one is 250 kilometres long gas pipeline connecting Ahmedabad to Rajkot and second one is the 200-kms long stretch between Anand and Pipavav, in Amreili district," Saurabh Dalal, Minister of State for Energy and Petrochemicals told Business Standard on Wednesday.

GSPL has invited applications from construction companies for High Pressure Natural Gas (HPNG) pipeline which is to be constructed on Engineering, Procurement and Construction (EPC) basis.

The stretch linking Ahmedabad to Rajkot will cover important industrial locations like Morbi, Thanghadh, Surendranagar, Wankaner while the second project to Pipavav from Anand will not only cater to the industrial gas demand but also will cater to the demands for gas meant for domestic usage.

Interestingly, GSPCL, the nodal agency for the state government have already awarded contract for distribution of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) for Surendranagar and Rajkot districts to GAIL India Ltd but because of lack of infrastructure to reach gas in these areas, retail sales of both CNG anad PNG could not be kicked off yet which is one of the few major reasons for delays in starting gas retail sales in Gujarat.

"Once the gas pipeline construction is over which we expect to be completed by early 2006, GSPCL will be able to supply gas in these areas as it has already entered into gas purchase agreement with Gail, apart from its own resources of gas production as Hazira field.

GSPCL which also has been exploring in the Krishna-Godavari basin, is trying to put on the gas carrying infrastructure in place before it starts getting gas out of its own resources and GSPL, is expected to carry higher amount of gas from 9 MMSCMD of gas it is carrying presently including 3 MMSCMD of Liquefied Natural Gas (LNG)," added Dalal.

GSPL has already signed Gas Transmission Agreements (GTAs) with Essar Steel, Gujarat Gas, Gujarat Alkalies and Chemicals Limited (GACL), Gujarat Electricity Board (GEB), Ahmedabad Electricity Company (AEC) and IFFCO, Adani Group.

As pipelines are an integral part of the infrastructure required for the Natural Gas as well as LNG industry and with supply of gas slated to increase manifold in the coming years, the company's operations are also expected to grow.

By the end of 2005, the company's revenues are expected to reach Rs 3000 crore. GSPL is the first company in India to offer gas transportation services on a 'Common Carrier and Open Access' basis.