HPCL wants GAIL to extend pipeline to Chhara

Vol 24, PW 19 (12 Aug 21) Midstream, Downstream, Renewables

Despite objections from Gujarat State Petronet (GSPL), Hindustan Petroleum and ONGC are backing GAIL's controversial proposal to lay a 170-km pipeline from the upcoming Swan LNG project at Jafrabad to Dahej.

GSPL accuses GAIL of infringing on its business. But HPCL believes GAIL must go ahead with the project and extend it by 80-km from Jafrabad to HPCL's under-construction 5m t/y LNG terminal at Chhara.

"Chhara is not far from Jafrabad, so it makes sense," contends an HPCL source. In July (2021), HPCL chief general manager of gas marketing Vijay Raj Saxena and chief general manager operations and pipelines K Sreenivasa Rao approached the PNGRB supporting the proposed GAIL pipeline proposal.

ONGC's executive director and chief marketing Sanjay Kumar came separately. Rao was earlier CEO of the now-defunct joint venture HPCL Shapoorji Energy (Pvt Ltd), which promoted the Chhara LNG terminal.

HPCL believes extending the GAIL pipeline to Chhara would suit HPCL by connecting it to India's 'gas artery' - the HVJ. "This pipeline is perfect for taking R-LNG to our Mumbai refinery," adds HPCL.

HPCL's 7.5m t/y Mumbai refinery is an anchor customer for Chhara, expected to be ready for commissioning by April 30 (2023), said Gujarat chief minister Vijay Rupani on March 16 (2021). ONGC also supports the proposed GAIL pipeline after 'booking' 1m t/y of re-gasification capacity at the Swan LNG terminal in 2016.

"Any LNG terminal should have connections with multiple pipelines for uninterrupted gas supplies," says an ONGC source, citing the multiple pipelines that connect Dahej and Hazira. "You can't depend on a single pipeline or a single pipeline operator; additional connectivity improves access to third-party users."

HPCL and ONGC want more details from GAIL about the pipeline. "GAIL has not mentioned the pipeline completion date," ONGC tells us.

"If part of the pipeline is subsea, it needs to mention the timeline." GAIL is also silent on the pipeline diameter, says ONGC.