More gas pipelines as Delhi unlocks IGGL's cash

Vol 23, PW 5 (16 Jan 20) Midstream & Downstream

Newly-incorporated Indradhanush Gas Grid (IGGL) is predicting a bright future for northeast India following union cabinet approval of a 60% capital grant for its proposed 1656-km gas grid project on January 8.

"Within ten years we will see fantastic results for the northeast economy," says an IGGL source. "The purpose of the grid is to bring gas to the northeast so demand is generated for economic development."

 Delhi's decision to sanction a Rs5520cr ($770m) grant towards the estimated Rs9265cr ($1.3bn) pipeline project cost is a welcome gift to the northeast by the Narendra Modi government amid a backdrop of continuing protests against the controversial Citizenship Amendment Act in Assam. Numaligarh Refinery in Assam will be the first destination for the pipeline.

"Our pipeline will first be laid to Numaligarh because it needs gas," adds our source. "IGGL should begin earning revenue from this within two years even though the project deadline is 2024."

IGGL plans to call a board meeting end-January to re-approve the remaining 40% funding which the promoters must provide. "Tenders for material procurement of pipes, valves, fittings and compressors will be floated soon (by the end of this fiscal or March 2020)," adds another source.

MECON. already appointed project consultant, will issue the tenders.

In October (2019) Deloitte was appointed financial consultant. "Other consultants will also be there but the main job is to get contractors and vendors," we hear.