Gail, BPCL Tap Reliance For Pune Piped Gas Project

Mumbai, July 25 | Updated: Jul 26 2004, 05:32am hrs
Gail India Ltd and Bharat Petroleum Corporation Ltd (BPCL) have approached Reliance Industries Ltd (RIL) for sourcing natural gas, for its piped natural gas project in Pune. Gail and BPCL will implement the project through a joint venture (JV) in Pune and Lucknow. A senior BPCL official said the company is also in dialogues with other potential suppliers of natural gas but did not name the companies. Though talks with RIL are on, nothing has been firmed up so far. The official added that that the JV was looking at securing gas from RILs find in the Krishna-Godavari (KG) basin.

The JV which will begin work on its project in Pune early next year has tied up with Petronet LNG for its current requirements. Petronet has a 5 MMBTU LNG terminal at Dahej in Gujarat.

According to the official, the initial demand would be around 0.4 MMBTU of gas for Pune. "Once the requirement increases, we would have arrived at a decision with RIL," the official hoped. For the moment, the JV has been assured by Petronet LNG that their quota would be increased since the capacity of the Dahej terminal is being doubled from the present 5MMBTU to 10 MMBTU. The JV has estimated that their peak requirement for Pune would be around 3 MMBTU once the project is fully implemented, depending on the number of households converting to piped gas. The project is being implemented in Pune city and its outskirts.

The Rs 600 crore project would be implemented in two phases. The first phase would be completed in three years which will involve the creation of the infrastructure for gas transportation. The second phase is expected to take anywhere between six and ten years; the actual supply of gas would begin here.

Gail and BPCL have a 22.5 per cent stake each in the project while the state government holds a five per cent stake. The remaining 50 per cent would be offered to financial institutions.