PNGRB confirms $2.76bn win for Gujarat Petronet

Vol 14, PW 24 (02 Jun 11) Midstream & Downstream
     

Eight months late, the starting shot has finally gone off in the race to lay a total of 3811-km new gas transmission pipelines across India.

The Petroleum & Natural Gas Regulatory Board (PNGRB) this month officially awarded three major cross-country gas pipeline projects - together worth $2.76bn - to a consortium led by Gujarat State Petronet. Ratan Watal, secretary to the PNGRB, confirmed the award in a letter to Gujarat Petronet general manager (commercial) Ravindra Agarwal on May 18.

Now it’s a race against time for project-leader Gujarat Petronet and partners IndianOil, Hindustan and Bharat Petroleum to complete work by May 18, 2014 on the following three pipelines: · 1611-km from Mallavaram in Andhra Pradesh to Bhilwara in Rajasthan · 1688-km from Mehsana in Gujarat to Bhatinda in Punjab · 512-km from Bhatinda to Srinagar passing through Jammu Executing a contract of this magnitude will be a huge challenge for the GSPC-subsidiary, which until now has worked mainly in Gujarat. To avoid delay, GSPC managing director Tapan Ray wants the GSPL-led consortium to set up separate JVs for each pipeline.

“Rather than just one JV in charge of the overall project it’s better to have three separate JVs,” explains a senior GSPC source. “Ray believes there will be more ‘flexibility’ with three JVs.

” If one JV covers the whole project, we hear, a delay at one pipeline could affect progress on the other two. Gujarat Petronet (52%), IOC (26%), BPCL (11%) and Hindustan Petroleum (11%) won these projects in October last year.

In his May 18 letter, Watal asks Gujarat Petronet to submit Rs40cr ($8.83m) as a performance bond for the Mallavaram to Bhilwara and the Mehsana to Bhatinda projects. For the Bhatinda to Srinagar pipeline, GSPL must submit Rs15cr ($3.31m) as a performance bond.