UP, Gail sign gas supply agreement

Gail India Ltd and the Uttar Pradesh State Industrial Development Corporation (UPSIDC), the nodal agency for distribution of liquefied natural gas in the state, have entered into an agreement to explore the potential of gas supply in Uttar Pradesh.

The agreement covers gas distribution and the setting up of pipelines and other infrastructure in the state.

As per the agreement, Gail, the state-run gas transmission firm, will conduct a survey to assess the gas demand potential and the pipeline requirements for gas distribution.

After the feasibility study, which will be submitted to the state government within a year, the two companies will establish a centralised gas distribution system for Lucknow, Kanpur, Noida, Greater Noida and Bareilly.

According to the agreement, the potential for using the proposed gas infrastructure for telecom services will also be looked into. Gail supplies 11.3 million standard cubic metres per day (mmscmd) of gas to 250 industrial units in the state. Most of these units have claimed improvement in their performance after switching over to gas.

For instance, glass units in Ferozabad can now manufacture glass without bubbles. This was not possible earlier since temperature control could not be achieved using coal as feedstock. Gail's Hazira-Bijapur-Jagdishpur (HBJ) pipeline is supplying gas to fertiliser units in the state.

The gas that Gail is importing from Qatar will be transported from the landing point at Dahej through a proposed pipeline that will run parallel to the HBJ pipeline.

Meanwhile, Gail plans to invest Rs 700 crore in expanding its main trunk HBJ pipeline network by 2005. "We are progressing with pre-project activities to expand the HBJ pipeline at an estimated cost of Rs 700 crore," a senior company official said.

The expansion consists of a 139 km pipeline to be laid from the HBJ point at Thulendi to Phulpur in UP. The project, which will help in increasing supply to existing customers and targeting new customers, may cost Rs 350 crore. It will become operational by April 2005.

Besides, a 114 km pipeline from the HBJ point at Dadri to Panipat in Haryana is being built to service the Panipat refinery of the Indian Oil Corporation and other new customers in Haryana. The second extension was budgeted at Rs 350 crore and would be complete by April 2005, he said.

The HBJ pipeline is a 2,800 km conduit that runs from Hazira on the western coast of India through Bijaipur to Jagdishpur in north India and includes links to Delhi; it forms the backbone of the natural gas transmission system in India.

In July 1998, Gail completed a Rs 2,380 crore upgrade of the pipeline. The upgrade, which included the laying of 505 km of additional pipeline, expanded the capacity of the HBJ pipeline by 83.5 per cent, from 18.2 million cubic metres of gas per day to 33.4 million cubic metres of gas per day.