GAIL to help unlock Tripura's gas wealth

Vol 7, PW 11 (13 Aug 03) Midstream & Downstream

Tripura in India's northeast is perhaps the only state in the country where natural gas availability far exceeds usage.

Tripura is rich in natural gas but more than a third of it lies locked underground for want of users. Experts reckons Tripura's gasfields can supply 4m cm/d natural gas, but end up supplying only 1.25m cm/d.

One of the reasons for this is that Tripura is a mountainous, landlocked state with poor road and rail connectivity with the rest of India. West of the state lies Bangladesh, through which a pipeline can be laid to supply gas to India.

But strained political relations between India and Bangladesh come in the way. Then, there is the state's armed separatist insurgency that has, so far, deterred investors.

Now, things could change for the better. Last month GAIL set up a joint venture with Tripura state-owned Tripura Industrial Development Corporation and Assam state-owned Assam Gas Company.

GAIL will take a 29% stake in the joint venture while TIDCO and AGCL will take 10% each. No decision has yet been taken on who takes the balance equity, most likely financial institutions.

GAIL will appoint the managing director of the joint venture and the post of chairman will be rotated once every two years amongst the three equity partners. Also, GAIL will appoint three directors to the board of the joint venture, while AGCL and TIDCO will appoint one director each.

Once the joint venture is ready, GAIL will put in place a city gas project in the state capital Agartala. Today state-owned Tripura Natural Gas Company and AGCL jointly supply about 10,000 cm/d gas to households, commercial establishments and small-scale industries in Agartala.

"Our focus will be to widen the customer base and also to introduce compressed natural gas for vehicles in Agartala," says a GAIL source. "The state government has to give us the number of vehicles in Agartala.

A detailed feasibility report will also have to be prepared by a consultant."

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