GAILآ’s alternative pipeline proposal from Assaluyeh

Vol 9, PW 9 (11 Aug 05) Midstream & Downstream

Until now its been widely assumed that BHP Billiton is the only company that has prepared a detailed study of the pipeline route from South Pars to India through Pakistan.

Not true. Pakistans Sui Gas and Indias GAIL have prepared similar proposals for the pipeline route.

Much has already been written about the BHP study, prepared for the National Iranian Gas Export Company (NIGEC). But so far very little has been written about the GAIL proposal until now.

GAILs proposed pipeline, revealed in a June presentation made by chairman Proshanto Banerjee, is longer and hugs the Pakistani coast, unlike the BHP and Sui Gas routes, which cut across the country. On the critical issue of pipeline configuration, GAIL examines 12 different options assuming design pressures of 90 Kg/cm2 and 140 Kg/cm2, steel grades of X-70 and X-80 and line pipe sizes of 48, 52 and 56 inches.

Out of these, it shortlisted three options of which it selected Option 3: Specifications Comments Option 1 52-inch pipeline designed for 90m cm/d throughput at design pressure: 90Kg/cm Not preferred due to limitation in upgrading pipeline capacity to 120m cm/d Option 2 56-inch pipeline designed for 90m cm/d throughput at design pressure: 90Kg/cm Can go up to 120m cm/d but operating cost is substantially higher. Option 3 56-inch pipeline designed at 140 kg/cm2 pressure with initial flow of 90m cm/d expandable to 120m cm/d in 3rd year Appears to be the most cost-effective option.

GAIL wants the wellhead gas cost to be comparable to the price of gas sold in Iran to domestic consumers and the transportation tariff to be computed on the basis of a reasonable project IRR (Internal Rate of return) including volumes that Iran may transport through this pipeline for its domestic market. GAIL stresses the price sensitive nature of the Indian market.

Large gas volumes are required but demand is highly sensitive to price, reads the study. The price of gas should be affordable to the power and fertiliser sectors.