GAIL to invest Rs 30,000 cr in next 3 years, scouts for LNG supplies abroad

India's top gas firm GAIL (India) Ltd plans to invest Rs 30,000 crore in the next three years as it expands petrochemical capacity and scouts for LNG supplies globally, its chairman Sandeep Kumar Gupta said on Wednesday.

The nation's top gas marketing and transportation firm is looking at liquefied natural gas (LNG) as a transport fuel, joining Essar-promoted GreenLine which operates the nation's largest LNG-powered fleet of heavy commercial vehicles.

Speaking at the company's annual shareholders meeting, Gupta said the firm had a Rs 10,000 crore capex in the 2022-23 fiscal (April 2022 to March 2023).

"The company is growing steadily and creating infrastructure facilities across the nation. We are targeting to incur a capex Rs 30,000 Crore in the next three years, mainly on pipelines, ongoing petrochemical Projects, CGD projects, operational capex, equity contribution in group companies etc," he said.

With 15,600 kilometres of pipelines under operation and about 4,200 km of pipelines under construction, GAIUL will complete around 20,000 km of the national gas grid in the next calendar year, he said.

GAIL has also won the licence to lay, build and operate the 160 km Gurdaspur-Jammu natural gas pipeline.

With this, GAIL shall be enabling access to natural gas to the northern as well as north-eastern parts of the country also, through the Barauni-Guwahati pipeline (BGPL) (729 km) section as an integral part of Jagdishpur-Haldia & Bokaro-Dhamra Pipeline (JHBDPL).

Gupta said with India's increasing petrochemical demand, India is projected to contribute more than 10 per cent of the incremental global growth in petrochemicals over the next decade.

GAIL recently acquired private-sector chemical company JBF Petrochemicals Ltd, adding 1.25 million tonnes of petchem capacity.

"This acquisition offers GAIL an opportunity to add a new chemical product, purified terephthalic acid (PTA) to GAIL's existing product portfolio. Your company is also implementing 500,000 tonnes per annum of the country's first propane dehydrogenation PP plant at Usar and another 60,000 tonnes of polypropylene at Pata," he said.

Also, GAIL is also setting up its first specialty chemical plant of 50,000 tonnes isopropyl alcohol (IPA) at Usar in Maharashtra.

"With these additions, your company's portfolio of petrochemicals/ chemicals would become 3 million tonnes per annum," he said.

GAIL is also "exploring opportunities of ethane sourcing for its existing petrochemical plant while prospects of setting up of ethane cracker is also being studied," he said.

GAIL, he said, is exploring long-term LNG sourcing opportunities with major global LNG players.

"Your Company has issued an expression of interest (EoI) to explore the opportunity of equity acquisition in an LNG liquefaction terminal along with 1 million tonnes LNG tie up from USA.

"Your company has taken steps to provide tie-in connections with its natural gas pipelines to the upcoming new gas sources and upcoming LNG terminals to enable more and new gas injections into its pipelines," he said.

GAIL's Strategy 2030 also entails exploring various opportunities for increasing its renewable portfolio through organic as well as inorganic routes.

"Towards shaping a net zero future, your company is exploring various business avenues such as solar, biofuels, compressed bio-gas, carbon capture utilization and storage (CCUS), green hydrogen, etc," he said.

GAIL is setting up a 10 MW green hydrogen production unit based on PEM water electrolyzers (the largest in India) with a capacity of 4.3 tonnes per day at Vijaipur Madhya Pradesh, which is expected to be commissioned by December 2023.

The firm is carrying out studies to see the impact of various levels of hydrogen blending in natural gas.

"In a first-of-its-kind initiative in India, your company is setting up small-scale LNG plants to cater to diversified areas viz., geographic areas (GAs) not having connectivity to the pipeline, business of LNG as a transport fuel and monetizing gas from stranded fields," he said.

GAIL has procured two liquefaction skids of 16-18 tonnes a day capacity. "The skids are portable (Plug-&-play type) and scalable liquefaction units and are likely to be commissioned shortly," he said.

It is also exploring the possibility of small-scale manufacturing facilities in India.

"Additionally, GAIL is developing an LNG supply value chain to develop new markets and increase the consumption of natural gas in the country. The present focus is on developing a retail LNG network and installation of LNG infrastructure inclusive of LNG dispensing stations, small-scale LNG skids, etc. to increase its reach to newer customer segments," he said.

GreenLine, backed by Exponentia Ventures - the venture capital arm of the Essar Group, is pioneering green mobility in long-haul, heavy-duty freight transportation in India.

As the first and only logistics provider operating an LNG-powered fleet of 55-tonnes heavy commercial vehicles in the country today, GreenLine is partnering in the carbon neutrality missions of conscious corporates by enabling them to decarbonize their heavy trucking through a switch from diesel to a cleaner alternative LNG (liquefied natural gas).

GreenLine's LNG-powered fleet significantly reduces toxic emissions compared to diesel - carbon dioxide by up to 30 per cent, sulphur oxides by up to 100 per cent, nitrogen oxides by up to 59 per cent, carbon monoxide by up to 70 per cent, and particulate matter by up to 91 per cent.

It has signed up to decarbonize their heavy trucking logistics of Tata Steel, Reliance Industries, JSW Cement, UltraTech Cement, Nestle, Delhivery, JK Lakshmi Cement, Dalmia Cement and JSPL.