US help sought for shelved gas grid

In a peculiar case of time over-run, US consultants have been invited to study and provide technical assistance for setting up a national gas grid "" a network of cross-country gas pipelines linked to each other "" while the competent body to rule on the issue is the recently-constituted Petroleum and Natural Gas Regulatory Board (PNGRB).

The proposal for commissioning a US company for the gas grid was floated a couple of years ago by the petroleum ministry. Since then, the PNGRB has been set up, which is mandated to regulate the gas sector, including natural gas pipelines.

The bid documents have been hosted by the United States Trade and Development Agency (USTDA) on its website.

The contract for conceptualising the national gas grid is $920,000, which comprises a USTDA grant of $690,000 and a contribution of $230,000 by the Petroleum Planning and Analysis Cell (PPAC) under the petroleum ministry.

The documents call for bids "from US companies and individuals only" by December 27, the last date. A pre-bid meeting took place on December 5 this year.

PNGRB member BS Negi had told Business Standard during an interview in November this year that the concept of a national gas grid did not exist any more. Gas pipelines would be laid wherever there was demand, and the pipeline was economically feasible.

When contacted on the development, Negi declined to comment.

Moreover, the grid itself was to be laid by the government-owned gas utility GAIL, which now accepts that the gas grid will not be laid as it was planned.

GAIL Chairman and Managing Director UD Choubey said recently that pipelines would be laid by individual companies according to demand and supply. Reliance Industries (RIL) and Gujarat State Petroleum Corporation (GSPC) are also laying cross-country gas pipelines to transport their gas from the east coast.

"Just because the regulator has now been installed does not mean that the study cannot go ahead. US companies have the technical capability of laying pipelines and we are looking to harness that," justified a senior official in the petroleum ministry, adding the technical assistance from the US would also involve working out transportation tariffs for gas, besides natural gas storage facilities.

The development comes in the background of stiff opposition from the US to the proposed $7-billion Iran-Pakistan-India gas pipeline. The US has opposed the pipeline, which would have transported 30 million cubic metres per day (mcmd) of gas initially, and would later have been ramped up to 60 mcmd.

Currently gas availability in India, from both domestic sources and imported liquefied natural gas, is around 85 mcmd, which is only half the demand of around 179 mcmd.

"The USTDA is also in talks with Hindustan Petroleum and Bharat Petroleum for other projects," said the petroleum ministry official.