GAIL predicts doubling of gas sales in a year

Vol 10, PW 5 (29 Jun 06) People & Policy
     

GAIL chairman Proshanto Banerjee might be counting his last few months in office but that hasnt stopped him mapping the companys future.

Banerjee, who hopes to get an extension at GAIL after his term runs out on 29th October, despite the denial to Subir Raha from ONGC, has chalked out an ambitious target for his company: he believes GAIL can double all-India gas sales from the present 80m cm/d to 160m cm/d by next year. Not through any huge gas find, but through the companys expertise in laying pipelines connecting the countrys critical economic hubs.

Its not difficult to see how domination of the transmission business will allow GAIL to double gas sales over the next 12 months. Look how GAIL successfully blocked Shells deal with NTPC to sell gas to the Anta, Auraiya and Dadri power plants this month.

GAIL was L2 after Shell in the NTPC tender but NTPC was forced to reject Shell and buy from GAIL. Why GAIL has gas and a network (HBJ) to transport it; Shell has gas, but no network.

Worryingly, GAIL wants to duplicate this model with future pipelines, starting with the 24m cm/d capacity 1166-km Dahej to Dabhol pipeline through Uran and Panvel. Banerjee clearly believes this pipeline would give him the freedom to pump gas to Maharashtra - but on whose terms Below are other proposed pipelines where GAIL could replicate its model: Dabhol to Bangalore (850-km) and on to Chennai (300-km) Kakinada to Kolkata (1000-km) with a capacity to transmit 10m cm/d Kakinada to Panvel (1035-km) passing through Hyderabad and Pune HBJ expansion (920-km) to Punjab, Haryana, Rajasthan and UP Kakinada to Chennai (580-km) with capacity to transmit 10m cm/d Kolkata to Jagdishpur (853-km) with 10m cm/d capacityAlso under GAIL control will be the proposed 1350-km pipeline to India from Myanmar.

All the above, when added to the existing 5600-km natural gas high pressure trunk lines owned by GAIL, would give it unrivalled control over the countrys gas transmission business. Whether the government has the will to break this stranglehold is as yet unclear.

What is clear is that GAIL will fight any move to strip it of this profitable monopoly.

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