Reliance promise 'tall' as a Mumbai high-rise

Vol 14, PW 10 (04 Nov 10) Midstream & Downstream

Reliance supremo Mukesh Ambani will soon move into the world’s most expensive home, a soaring tower of steel and glass in south Mumbai.

Just as tall, it seems, is his company’s latest promise to lay four major cross-country gas pipelines by the end of 2012. Reliance made this pledge on October 25 at a closed-door meeting in Delhi, chaired by additional oil secretary Sudhir Bhargava, called to “review” nine pipeline projects authorised by the oil ministry in mid-2007, shortly before the country’s gas regulator began operating.

Work on five authorised GAIL pipelines is on schedule, noted ministry officials, but work hasn’t even begun on any of the four proposed Reliance pipelines. Reliance representatives assured the ministry that pipes and compressors for all four pipeline projects would be ordered in January so actual pipeline laying work can begin around October next year (2011) after the monsoon.

They also promised to complete all pipeline laying work by the end of 2012 - which means Reliance will have just about a year to lay 2629-km of pipeline in total! Reliance supporters believe this is achievable. “Reliance doesn’t have to go through a time-consuming tendering process like (state-owned) GAIL,” says a source.

“It's known for executing projects quickly.” Reliance, he adds, has also carried out route surveys for all four pipelines and has the necessary legal clearances to acquire 66% of the required land.

But one sceptical ministry insider doubts Reliance will start work on any of these pipelines for the simple reason it has no gas to pump through them. “Knowing the way Reliance works,” he says, “company bosses will take a call in January and ‘manage’ the ministry to postpone again.

No private company will lay a pipeline when gas isn’t available.” He believes Reliance is simply reluctant to lose ownership of these projects, which it secured on ‘nomination’ from the oil ministry without “messy” bidding.