India’s GSPL surrenders licence to build gas link to Jammu-Srinagar
Gujarat state-promoted GSPL won a licence in 2011 to lay the 740km pipeline from Bathinda in Punjab state, with the condition that extension to Jammu and Srinagar would depend on a technical and commercial feasibility report
AHMEDABAD/NEW DELHI: Gujarat State Petronet (GSPL) wants to pull out of a northern India gas pipeline project that would link Punjab state to the hilly areas of Jammu and Srinagar due to high construction costs, officials said.
GSPL in August wrote to the Petroleum and Natural Gas Regulatory Board (PNGRB) to surrender authorisation to extend the pipeline beyond Punjab to Jammu and Srinagar citing low gas demand and technical complexities, according to a letter seen by Reuters.
“The difficult terrain (in Jammu and Srinagar) and demand assessment for gas shows that the pipeline is not commercially viable,” Sanjeev Kumar, Joint Managing Director of GSPL, told Reuters.
Gujarat state-promoted GSPL won a licence in 2011 to lay the 740km pipeline from Bathinda in Punjab state, with the condition that extension to Jammu and Srinagar would depend on a technical and commercial feasibility report.
The PNGRB asked GSPL in February to build part of the pipeline from Bathinda to the border of Punjab by the end of this year and extend it to Jammu and Srinagar by Feb. 24, 2022.
The PNGRB has not yet accepted GSPL’s offer to surrender its licence, Kumar said, adding that his firm could consider laying the pipeline to Jammu and Srinagar if the federal government provides financial support.
An oil ministry official said the government is considering giving financial assistance for the project to help kick-start economic growth and the use of gas in a region that has trailed the rest of the country.
India is strengthening gas infrastructure to raise the share of the cleaner fuel in its energy mix to 15% by 2030, up from 6.3% now.
The federal government has provided financial aid to two projects — the 2,500km pipeline linking the states of Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha; and the 1,656km grid in the north east.