Reliance begins work on Kakinada to Chennai pipeline

Vol 10, PW 19 (25 Jan 07) Midstream & Downstream

Reliance has set in motion the laborious process of obtaining local permission to lay a 450-km pipeline to transport D-6 gas from Kakinada to industrial and commercial customers in the Chennai area.

Next month Reliance will ask Tamil Nadu state authorities to appoint â€کCompetent Authorities’ to begin the process resulting in Right of User (RoU) permission for the pipeline route. â€کCompetent authorities’ have already been appointed in Andhra Pradesh.

Reliance is believed to be considering a 36-inch diameter 450-km pipeline carrying 20m cm/d gas from D-6 to Vijaywada, Nellore and Chennai. “Compressors will be installed to accommodate any additional gas up to the 33% excess capacity,â€‌ says an industry source.

On 1st October 2006, the oil ministry invited EoIs within two months to book up to 33% extra capacity in the pipeline from Kakinada to Chennai. IOC and power company LANCO submitted EoIs by the deadline but BG and Reliance Energy submitted EoIs only last month – after the deadline.

None of the four EoIs meets the government criteria, which is hardly surprising given the draconian nature of the conditions. Among the requirements was documentary evidence of a gas supply source as well as customers to buy this gas.

Besides, the ministry wanted details of the capacity sought; the locations between which the capacity was required and for how long; detailed composition of the gas to be transported; type of agreement (take-or-pay or any other) with the pipeline owner Reliance; and, official authorisation to be a gas transporter or user. Despite this evident lack of genuine interest, Reliance will go ahead on its own and lay the pipeline, building in 33% extra capacity, as required by the ministry’s new gas pipeline policy.