Dahej to Uran pipeline will be extended to Dabhol

Vol 9, PW 23 (09 Mar 06) Midstream & Downstream

GAIL originally wanted the Dahej to Uran pipeline up and running by February next year.

But the oil ministry has other ideas and has directed GAIL to extend the Dahej to Uran pipeline to Dabhol on a priority basis. Ministry officials also want the pipeline to transport regassified LNG from the Hazira LNG import terminal owned by Shell and Total.

Crucially, the ministry wants the extension to Dabhol commissioned in record time by December this year. The ministry said the pipeline should be charged with gas by 1st December, we hear.

They say Maharashtra is facing an acute shortage of power and this is going to get worse. The ministry wants this issue addressed very quickly and relief given to Maharashtra.

Matters have acquired a sense of urgency because of the governments plan to revive the Dabhol power project by May this year, even if it means using naphtha, to meet high power demand in summer from Maharashtra. Running Dabhol on naphtha will produce expensive electricity, so the ministry wants the project to run on (cheaper) gas.

Maharashtras case has received a boost because the present oil minister Murli Deora is a MP from Mumbai. Present power minister Sushilkumar Shinde is also a former Maharashtra chief minister.

A day after Deora took over Maharashtra chief minister Vilasrao Deshmukh met him in Delhi to lobby for more gas for the states power stations and quicker action on Dabhol. Other meetings followed and the oil ministry directed GAIL to construct the pipeline on a crash basis.

A review meeting was held in the ministry in the last week of February and on 27th February, oil secretary MS Srinivasan wrote to GAIL chairman Proshanto Banerjee asking him to extend the Dahej to Uran pipeline to Dabhol on a priority basis. GAIL has been directed to do everything possible to achieve this, we hear, including a promise that it would be allowed to build the extension on a turnkey basis.