Vedanta pipeline proposal attacked by GSPL

Vol 24, PW 18 (29 Jul 21) Midstream, Downstream, Renewables

Anil Agarwal-owned Vedanta is also under fire from Gujarat State Petronet (GSPL) over a proposed dedicated gas pipeline from its Rajasthan fields to the Rosneft and Trafigura-owned 20m t/y Nayara refinery at Vadinar.

In GSPL's sights is a five-page June 2 (2021) request from Vedanta deputy CEO Prachur Sah to the PNGRB for permission to lay a dedicated 8-inch diameter 3.25-km gas pipeline connecting Salaya to the Nayara refinery at Vadinar. GSPL presently supplies 1.2m cm/d of gas to Nayara through its pipeline network but fears Vedanta will replace it as Nayara's leading supplier if the proposal goes through.

Vedanta already operates a 594-km gas pipeline from Barmer to Salaya feeding gas to 36 heating points along the parallel Barmer to Bhogat crude pipeline to heat waxy Barmer oil to above 65 degrees Centigrade to keep it moving. "Through this (parallel gas) pipeline," alleges a GSPL source, "Vedanta also wants to supply gas to Nayara."

He adds the PNGRB should reject Vedanta's application because Regulation 19 of the Natural Gas Pipeline Authorisation Regulations prohibits upstream infrastructure from supplying gas. "The proposed 3.25-km pipeline does not qualify as a dedicated pipeline to a customer as it is an extension of a 594-km dedicated gas pipeline developed as part of assets of oilfield development under the PSC dated May 15 (1995) for the RJ-ON-90/1 block under the jurisdiction of the DGH," says GSPL in its June 24 (2021) response.

GSPL adds Vedanta developed the pipeline with $1.1bn recovered as 'Cost Petroleum' from the government's share of profit petroleum. According to GSPL, Vedanta's application changes the purpose of the old 594-km pipeline from a dedicated upstream asset to a 'common carrier' gas pipeline.

As such, argues GSPL, it would need authorisation under Section 16 of the PNGRB Act.