Regulator wants GSPC and GAIL pipeline alliance

Vol 13, PW 6 (27 Aug 09) Midstream & Downstream

GAIL and Gujarat State Petronet might soon by asked to submit a joint Expression of Interest (EoI) to lay a single pipeline from Andhra Pradesh to northwest India.

PETROWATCH learns the oil and gas regulator is taking a dim view of attempts by the two rival companies to lay parallel pipelines covering almost identical routes from southern India to northern markets. “If GAIL is given the go-ahead then GSPC will lose out,â€‌ we hear.

“But if GSPC is given the go-ahead then GAIL will lose out.â€‌ After hearing each company the gas regulator has concluded that it would be in the national interest to ask them to join forces and submit a fresh EoI jointly to lay a single pipeline.

Criticism is levelled at separate EoIs filed by GAIL and Gujarat Petronet late last year and early this year. On November 20 last year, GAIL submitted an EoI to the PNGRB to lay a 1100-km pipeline from Vijayawada in Andhra Pradesh to Vijaipur in Madhya Pradesh, where it would link up with the HBJ.

Two months later on January 6, Gujarat Petronet proposed a 1460-km gas transmission pipeline from the proposed landfall site of its KG gas discovery at Mallavaram village in Andhra Pradesh to Bhilwara in Rajasthan. Both GAIL and GSPC stress their pipelines are in the national interest because they will deliver gas to some of the most backward regions in India.

But some in the gas regulator’s office argue that the two pipelines amount to a duplication of effort and a scandalous waste of national resources. “Examine both EoIs and you will see that even the names of some of the factories and power plant customers they want to supply are the same,â€‌ adds our source.

If GAIL and Gujarat Petronet fail to agree the gas regulator will have to reject one application and ensure that the losing party is granted capacity in the winning pipeline in line with Common Carrier rules.