Gujarat Petronet to deliver gas to Kutch in June 2009

Vol 12, PW 3 (26 Jun 08) Midstream & Downstream

GSPC pipeline subsidiary Gujarat State Petronet has hired an EPC contractor to begin laying an 18-inch diameter pipeline that will carry gas to the semi-desert and remote region of Kutch in west Gujarat.

PETROWATCH learns Gujarat Petronet issued a Letter of Intent on May 28 to Ahmedabad-based Jaihind Projects to lay the 130-km pipeline that will begin flowing gas to the Kutch region by June 2009 and link this earthquake devastated region to the Gujarat gas pipeline grid, which criss-crosses the state. Expected to cost around Rs200cr ($50m), work on the pipeline, which will start in the ceramic manufacturing hub of Morbi and end in the Gujarat coastal port of Mundra, will begin around September this year, after monsoon rains have subsided.

Gas demand projections from factories in the backward Kutch region are relatively modest, at around 3m cm/d, according to Gujarat Petronet, but expected to rise with time. “Later on spur lines will be laid to Bhuj and IFFCO’s fertiliser factory at Adipur,â€‌ Gujarat Petronet tells us.

As with most gas passing through the pipeline grid, supplies to Kutch will be a combination of several sources: GSPC production from the Hazira gasfield operated by Niko; R-LNG from the Petronet-LNG operated terminal at Dahej and the Shell-Total operated terminal at Hazira; and Reliance gas from D6, which should start flowing later this year. Hopes are alive that future supplies will also come from a third LNG terminal at Mundra, promoted by GSPC with Essar and the Adani group.

Another promising area expected to witness fast growth and high gas demand are factories planned in a tax-free Special Economic Zone near Mundra, one of 51 zones proposed across Gujarat. With an area of 45,612-sq km, Kutch is India’s largest administrative district and home to 1.6m people.

Seven years ago 16,000 people perished in Kutch following a devastating earthquake measuring 8.6 on the Richter scale.