Telegraph Hurdle to Bengal gas project R. Suryamurthy

Telegraph Hurdle to Bengal gas project R. Suryamurthy


New Delhi, July 5: A major industrial project in investment-starved West Bengal is facing roadblocks prior to its implementation.

The proposed natural gas pipeline from Bengal’s Contai to Dattapulia and Paradip (Odisha) planned by H-Energy Pvt Ltd, a subsidiary of real estate company Hiranandani Group, seems to have run into rough weather with stiff opposition from state-owned gas transporter GAIL (India) Ltd, refiner Indian Oil Corporation and Adani Enterprises.

H-Energy is setting up a floating storage regasification unit (FSRU) on the sea near Digha with capacity to convert 6 million tonnes per annum of imported LNG to natural gas.

The LNG terminal is expected to be commissioned in 2018-19 at a cost of around Rs 2,400 crore, while the pipeline requires Rs 2,700-crore investment, both for the sub-sea and onshore components put together.

The company has submitted an expression of interest to the Petroleum and Natural Gas Regulatory Board (PNGRB) to lay the pipeline from Contai (East Midnapore) to Dattapulia (Nadia) and Paradip.

The oil regulator has sought the views of the industry players on the issue, resulting in objections from GAIL (India), IOC and Adani Enterprises.

Officials said the regulatory board would “consider all aspects of the proposals and objections raised by other players before taking a call on the issue”.

The Adani group, which is setting up a 10-million-tonne-per-annum LNG regasification terminal at Dhamra (Odisha) that is likely to be commissioned in 2018-19, said the terminal would cater to the gas demand in the same markets of Bengal, Odisha and Andhra Pradesh. The company said it had already signed MoUs with key buyers of gas, such as IOC and GAIL.

It said it was necessary that “all the existing and future gas sources and markets should be considered for deciding on the route of the pipeline to avoid duplication of work and infructuous investments”.

IOC said H-Energy’s pipeline route had considered only its Digha gas source. However, there are “other gas sources in the vicinity of the proposed pipeline route, there is a need to integrate all the networks”.

The PSU said H-Energy’s pipeline should be connected to the Dhamra port as well as to the already authorised Kakinada-Srikakulam gas pipeline of Andhra Pradesh Gas Distribution Corporation Ltd at Srikakulam. Connecting the pipeline with Kakinada-Srikakulam will facilitate the flow of domestic gas from the Krishna-Godavari field to Odisha and Bengal, thereby boosting the development of city gas distribution networks in the two states.

GAIL in its objection said there was “no requirement for laying the proposed trunk line from Contai to Dattapulia as its Jagdishpur-Haldia pipeline would be able to meet the gas demand in the demand centres more cost effectively”.

The gas demand at Paradip, Bhubaneshwar, Cuttack, Haldia and Calcutta can be met by its two pipelines: Jagdishpur-Haldia and Surat-Paradip. The load centres such as Kolaghat and Uluberia are also within the 50km tariff corridor of the Jagdishpur-Haldia pipeline.

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