Focus loses battle for longer pipeline from SGL

Vol 23, PW 2 (14 Nov 19) Midstream & Downstream

IndianOil and Gujarat State Petronet (GSPL) have won the argument against Focus Energy and GAIL with their proposal for a shorter pipeline to transmit gas from the SGL field at Focus-operated RJ-ON/06 in Rajasthan at Langtala village.

On November 6, the PNGRB bowed to pressure and scrapped a Focus proposal to lay a 580-km pipeline from Langtala to Bhilwara and on the same day said it was replacing the project with a shorter 440-km pipeline from Langtala to Pali, passing through Jodhpur. Anyone interested can attend a pre-bid scheduled for December 6 (2019) and submit a bid deadline by the March 6 (2020) deadline.

With a proposed gas transmission capacity of 5m cm/d, the new pipeline is designed to transport 4m cm/d additional gas from RJ-ON/06. Focus and affiliate company Granada Services originally submitted an EoI to the PNGRB to lay a pipeline from Langtala to Bhilwara on March 14 (2018).

GAIL supported the proposal but GSPL India Gasnet (GIGL) consortium partners GSPL (52%) and IndianOil (26%) objected and asked the PNGRB to re-route the pipeline, saying the route to Bhilwara was too long and the connecting GAIL network could handle only 2m cm/d. "The new pipeline route is shorter by almost 140-km," says an IndianOil source.

"This will help reduce the capital cost needed to provide connectivity and this in turn will reduce the pipeline tariff and make the gas more affordable."

Focus's original proposed pipeline was designed to pump RJ-ON/06 gas into the HBJ operated by GAIL but the new pipeline will instead connect to GIGL’s upcoming Mehsana to Bhatinda pipeline at Pali. “The earlier Bhilwara pipeline was not commercially viable,” a GSPL source tells us. “The new route will cut costs by over 30%.” In its November 6 public notice the PNGRB justifies its move to scrap the old project saying, “the tariff quoted by sole bidder GAIL was excessively high, impacting the viability of the gas itself.” For the new pipeline, the sale of bid documents began on November 7 and all bidders must pay a non-refundable application fee of Rs30 lakhs ($42,000) and a bid bond of Rs8cr ($1.12m). Only companies with a minimum combined net worth of at least Rs264cr ($37m) can bid. This new project will pass through Pachpadra, site of Hindustan Petroleum's proposed 9m t/y Barmer refinery and Jodhpur before reaching Pali.

Focus loses battle for longer pipeline from SGL

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