RIL may alter pipeline project on Cauvery find

The discovery of oil and gas from the Cauvery basin, about 60 kms from Pondicherry, may help Reliance Industries Limited (RIL) save around $1 billion in its proposed pipeline project in south India.

The pipeline was supposed to connect Kakinada in Andhra Pradesh to Chennai, and then to Bangalore and Mangalore. "The current pipeline plans are based on gas discovery at the KG basin. If the gas findings are huge from Cauvery, we may think of altering the pipeline plans and connect Chennai from Pondicherry with an 80 to 100 km pipeline, instead of the 400 km-long pipeline from Kakinada to Chennai. This could lead to significant savings to the tune of about $1 billion," a RIL executive said.

The executive, however, said it was too early to take a decision since the company had not assessed the size of the discovery. Stress would be given to establish the pipeline across the entire country, said another official.

RIL is likely to take about six months to one year to estimate the oil and gas reserves available from the new discovery. RIL will soon drill three more wells in the 40,000 sq km area allotted to it in the 1,00,000 sq km Cauvery basin. According to current estimates, it would take a minimum of six years to extract gas on a commercial scale.

RIL is setting up a 1,400 km-long 48 inch pipeline from Kakinada to Bharuch in Gujarat, which is likely to be ready by March 2008. The 1,300 km Kakinada-Vasadevpur pipeline to the North East and the pipeline in south India to Chennai and to Bangalore and Mangalore is planned in the next phase.