Signs gas transmission pact with Karnataka Power Corporation

GAIL (India) commenced delivery of gas through its 1,000 km-long Dabhol-Bangalore pipeline on Monday.

The first recipient of the gas was Toyota Kirloskar Auto Parts, which will utilise the fuel for its captive 6.5 MW power plant. The company has installed a 73 km pipeline in Bangalore, mostly along the Outer Ring Road.

GAIL also signed a gas transmission agreement with Karnataka Power Corporation Ltd. (KPCL) for the supply of 2.1 million metric standard cubic metres per day (mmscmd) of natural gas for its 700 MW power plant at Bidadi in 30 months. The project, for which KPCL invited tenders for engineering, procurement and construction (EPC) in October last, is to be ready by 2015.

Speaking after commissioning the pipeline, Union Minister for Petroleum and Natural Gas M. Veerappa Moily warned KPCL that it might have to pay penalties to GAIL if it failed to be in a position to draw the gas within 30 months.

Cost

The pipeline, built at a cost of Rs.4,500 crore, has a total capacity of 16 mmscmd. GAIL Chairman and Managing Director B. C. Tripathi pointed out that the pipeline traversed through about 700 km across Karnataka. It would facilitate the use of gas as a source of energy or feedstock for industrial uses. He said GAIL was also investing petrochemical plants at Dahej in Gujarat. He urged KPCL to convert its 125 MW diesel-based power plant at Yelahanka to a gas-based system. “The increase in efficiency would result in savings of Rs.700-800 crore,” Mr. Tripathi said. He said the Kochi-Mangalore and Mangalore-Bangalore pipelines would be ready soon. Company sources said supply of gas to domestic users would have to await clearances from the Petroleum and Natural Gas Regulatory Board.

Asked if the rising cost of imported gas would not lead to higher electricity prices, Mr. Moily said although GAIL was ready to supply gas to power generating entities in the State they would have to make “adjustments in terms [of] pricing.” Mr. Moily said the government policy on shale gas and on coal bed methane was likely to be ready soon.

Chief Secretary S. V. Ranganath urged GAIL to expedite delivery of gas to domestic users, and to the transport corporations. He also urged the company to take an equity stake in the project to convert the Yelahanka power plant from one using gas instead of diesel. He complemented GAIL for having executed the project within three years.

M. R. Kamble, Managing Director, KPCL, said the Bidadi project, which had been on the drawing board for more than 15 years, had received all statutory clearances. “We are processing the tenders (for the EPC contract), and construction will be over within two-and-a-half years,” he said. He said KPCL planned to double the capacity at its Yelahanka power station, which is at present catering to the needs of the Railways, soon.