All eyes on Mehsana to Bhatinda gas pipeline

Vol 13, PW 24 (20 May 10) Midstream & Downstream

No bid deadline date has been set but the word is out that Gujarat State Petronet with partners IndianOil, Hindustan Petroleum and Bharat Petroleum is the consortium most likely to clinch the project to lay a prestigious 973-km gas pipeline from Mehsana in Gujarat to Bhatinda in Punjab.

Gujarat Petronet had originally proposed the 48-inch diameter cross-country pipeline back in 2008 but last October the Petroleum and Natural Gas Regulatory Board chose to invite bids from other competitors, infuriating the GSPC pipeline subsidiary. “Only the Gujarat Petronet consortium is equipped to win this project,” says a bidder.

“The regulator wants a Build Own Operate Transfer (BOOT) project so the successful bidder should be technically and financially sound enough to lay the pipeline and build 33% excess common carrier capacity.” Successful bidders, he adds, should be in the gas business and not just be engineering contractors like Welspun, Punj Lloyd, Larsen & Toubro or Russia's Stroygaz - all of whom want to bid.

More, this pipeline will compete directly with GAIL’s ongoing Dadri to Nangal pipeline project so any successful bidder must have gas supplies independent of GAIL or GAIL’s network. These conditions point to only one possible winner: the consortium led by Gujarat Petronet.

“Reliance Industries and Reliance Natural Resources are unlikely to bid seriously,” we hear. “Adani Enterprises is asking why bid if this project competes with (GAIL’s) Dadri to Nangal project” But what about GAIL, which also wants to bid “GSPL has put together a formidable consortium of state-owned companies which can take on GAIL,” we learn.

Curiously, GAIL continues to argue against a pipeline from Mehsana to Bhatinda, saying its own Dadri to Nangal pipeline project can meet all gas demand in north India, but is preparing to bid nonetheless.