Proshanto Banerjee identifies challenges for GAIL

Vol 5, PW 20 (21 Nov 01) People & Policy

GAIL chairman Proshanto Banerjee is not blind to the challenges ahead when the government allows free pricing of gas.

"The most important and obvious challenge before us is to have a sources of gas independent of ONGC," Banerjee tells PETROWATCH. "NELP will throw up its own gas producers, LNG is coming in and so is coal bed methane.

Only if we have varied sources of gas can we go to the market and confidently deal with customers." More than 80% of GAIL's gas is sourced from ONGC, reveals Banerjee. But both companies have yet to sign a post-APM gas sales agreement.

For Banerjee this is an acute source of worry but he is confident the agreement will be signed. "I will be talking to Raha on this soon," adds Banerjee.

"Unreasonable positions have been taken by both companies in the past. But we have to move ahead.

Why should we dissipate our energies competing with each other, when we can together focus on fighting the competition" Another key challenge before GAIL is inadequate pipeline infrastructure. Banerjee envisages upto Rs25, 000cr ($5.3bn) future investment in pipelines.

"We only have one major gas pipeline - the HBJ. We need grids in south India, east India and west India and a link-up between these grids.

The need for this will be acutely felt when LNG, NELP gas, Bangladesh gas and coal bed methane materialise. These various sources will materialise in 2006-07 and beyond."

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