Vibrant Chennai most promising city in CGD-VII

Vol 19, PW 17 (05 May 16) Midstream & Downstream
     

Chennai will be the most fiercely contested city under the PNGRB's seventh retail gas bidding round, predict likely bidders.

This despite the fact the Tamil Nadu state capital does not have gas pipeline connectivity. Of 11 cities listed in the upcoming round, for which bid documents are on sale from May 16, Chennai with a population of 4.6m [according to the 2011 census] is seen as the most lucrative.

"We've been waiting for Chennai for a long time," says a likely bidder. "Projected demand is likely to be at least 1m cm/d within five years - almost the same as Delhi and Mumbai." Despite the enthusiasm Chennai is unlikely to be connected to a major gas pipeline for at least three years or until IndianOil completes its proposed 1170-km pipeline from Ennore to Tuticorin awarded by the PNGRB in December 2015.

But a major challenge is that the Tamil Nadu government has since March 2013 banned companies from laying pipelines through farmland and has said they must lay pipelines along highways instead. "How can Chennai get gas without laying pipelines through agricultural land?" asks another likely bidder.

"We hope the PNGRB supports us on this [by intervening with Tamil Nadu authorities]." Another promising city is the Tamil Nadu industrial hub of Coimbatore with a population of 1.6m, where projected demand is 500,000 cm/d in five years, according to likely bidders.

LNG Summit