Odisha, GAIL to sign pact for Rs 5,000-cr pipeline soon

The joint venture (JV) agreement to be signed between the Odisha government and GAIL India Ltd for a Rs 5,000-crore natural gas pipeline is set to be finalized soon. The pipeline that will stretch from Surat (Gujarat) to Paradip will pass through two other non-major ports-Dhamara and Gopalpur and also some major towns like Angul and Sambalpur.

“We have sought the views of relevant departments and state agencies like Industrial Infrastructure Development Corporation of Orissa (Idco) and Industrial Promotion and Investment Corporation of Orissa Ltd (Ipicol) on the draft JV agreement submitted by GAIL. The state government has requested GAIL to make some changes in alignment to ensure that the pipeline passes through the KBK (Kalahandi, Bolangir and Koraput) region,” said an industry department source.

“GAIL has got the approval of gas regulator Petroleum & Natural Gas Regulatory Board (PGNRB) for the Surat-Paradip pipeline. GAIL was looking to have right of way for the pipeline but we have suggested it to acquire land for the purpose. The estimates for land acquisition are yet to be made,” the official added.

The Surat-Paradip pipeline will cover a distance of 400 km in Orissa. In addition to this pipeline, the 1,100-km Kakinada-Howrah pipeline which is under construction, is set to cover 434 km in the state.

GAIL has evinced interest in setting up city gas distribution (CGD) network in Odisha. Nine urban centres- Bhubaneswar, Khurda, Balasore, Kamakhyanagar, Rourkela, Anandpur, Jajpur, Bhadrak and Baripada have been identified for building CGD network in the state.

PNGRB which had earlier given a detailed presentation on potential for development of CGD infrastructure in Odisha had urged the state government to map geographical areas for developing such infrastructure. It had also called upon the state government to mandate use of compressed natural gas (CNG) in all commercial vehicles after setting up of CNG stations. Besides, the regulator had also asked the state government to waive sales tax on CNG.

The regulator expected the city gas distribution network to be a reality in the state by 2014. Meanwhile, GAIL is also interested to build an LNG (liquefied natural gas) terminal in the state at an investment of Rs 4,500 crore. The company had identified the ports of Paradip, Dhamara and Gopalpur as potential locations for establishment of the terminal. Indian Oil Corporation Ltd (IOCL) had recently inked a Memorandum of Understanding (MoU) with Dhamara Port Company Ltd (DPCL) for developing an LNG terminal inside the port area at a cost of Rs 10,000 crore. The terminal willhave a total capacity of 15 million tonnes per annum.