Reliance competes with GAIL in Tamil Nadu

Vol 10, PW 17 (14 Dec 06) News in Brief

Reliance Industries and GAIL will compete for the Tamil Nadu gas market, despite the proposed gas pipeline policys focus on exclusivity.

GAIL is planning a pipeline from Peddapuram to Chennai and has already received the RoU. The RoU is the last stage before detailed engineering studies begin for a pipeline, reveals a source.

In that sense GAIL is ahead. Reliance obtained ministry permission in October to lay a pipeline to transport gas from its eastern offshore block KG-DWN-98/3 to Chennai but it still needs the RoU and hasnt yet carried out a route survey.

More, it is yet to invite bids for interested parties to book 25% excess capacity, in line with strict government rules. Reliance estimates demand in Chennai at 2.5m cm/d and has drawn up plans to set up a city gas distribution network.

Unclear is how the ministry will reconcile competition between GAIL and Reliance in Tamil Nadu with its new pipeline policy that proposes marketing exclusivity.