Andhra ready to lay delayed Reliance pipelines

Vol 15, PW 1 (14 Jul 11) Midstream & Downstream

Andhra Pradesh state authorities have told the Petroleum & Natural Gas Regulatory Board (PNGRB) they are ready to begin work on two proposed Reliance gas pipelines if the Mumbai-based conglomerate continues to dither.

Four years ago Reliance received oil ministry authorisation to lay a 1100-km gas pipeline from the D6 gas landfall point at Gadimoga village near Kakinada in Andhra Pradesh to the port city of Haldia in West Bengal, and a 600-km gas pipeline from Kakinada to Chennai in neighbouring Tamil Nadu. But Reliance hasn’t yet begun work on these projects, which the oil ministry wanted completed by 2013.

Worse, it opposed two proposed gas pipelines proposed by the Andhra Pradesh Gas Infrastructure Corporation, or APGIC: a 600-km pipeline from Kakinada to Srikakulam town in north-eastern Andhra Pradesh; and a 400-km pipeline connecting Nellore city in Andhra Pradesh with the Chennai suburb of Ennore. When the PNGRB invited Expressions of Interest for these two projects, Reliance opposed them saying they competed with its own proposed gas pipelines.

This led the PNGRB to call an ‘open house’ on May 4 at its Delhi headquarters, attended by APGIC, Reliance and GAIL. Since Reliance was doing little to implement its own projects, PNGRB officials asked APGIC if it was willing to implement the Reliance projects instead.

On May 18, APGIC wrote to the gas regulator saying it would happily take on these projects if the regulator cancels Reliance’s authorisation. “We sent a reminder to the regulator in June but they asked us to wait for their decision,” says an Andhra government source.

Contacted by this report, Reliance says much has changed since the oil ministry granted authorisation to execute the two gas pipelines from Kakinada. “When we received authorisation we could market our gas freely,” says Reliance.

“Now the government allocates D6 gas making both pipeline projects unviable.”