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With GAIL’s Kochi-Bangalore LNG pipeline project which runs through Tamil Nadu stalled by the State Government’s stand, the fate of multi-thousand crore rupee investments planned by the two in partnership has become uncertain.
Following public opposition to GAIL running the high pressure gas pipeline under agricultural lands, the Chief Minister J. Jayalalithaa announced in the Assembly last week that it will only allow GAIL to run the pipeline along Highways to ensure farmers are not affected.
The State Government also submitted this decision in the Madras High Court on Tuesday in connection with a Court-proceeding on the issue.
The pipeline being put up by the Rs 30,000-crore Union Government enterprise, which operates gas pipeline infrastructure and gas-based power projects, runs 310 km through the western part of Tamil Nadu, including the industrial hubs of Coimbatore and Tiruppur, and Erode, Namakkal, Salem, Dharmapuri, and Krishnagiri.
Following an agreement between GAIL and the Tamil Nadu Industrial Development Corporation, a state-run enterprise, last year the Government had announced that GAIL will implement a Rs 1,000-crore LNG distribution pipeline network to distribute LNG to industrial consumers in the region using gas from the Kochi-Bangalore LNG pipeline.
The plans also included a Rs 500-crore LNG pipeline between Salem and Cuddalore to carry 6 million cubic metres of gas daily; and a floating storage regasification unit in south coastal Tamil Nadu at a cost of Rs 2,500 crore.
Oil and gas industry officials speaking on the condition of anonymity said the Tamil Nadu portion of the pipeline project is part of a Rs 3,263-crore pipeline project linking Kochi LNG Terminal to Kuttanad and Mangalore; and Kuttanad-Bangalore through the seven districts in Tamil Nadu.
The objective was to give the fuel to the power-starved industry in the area. An official pointed out that a Salem-Madurai link was also under consideration.
Pact with TIDCO
TIDCO has also entered into an agreement with GAIL, for a Rs 6,000-crore LNG distribution network in the State as part of the Ennore LNG import terminal, which is now awaiting environmental clearance. TIDCO is implementing the project with IOC. GAIL and TIDCO are also to jointly set up a 500-MW, Rs 2,000-crore LNG-based power project with provision to expand generation capacity through an additional investment of Rs 10,000 crore.
The State Government has estimated that it needs two LNG import terminals of 5 million tonnes each, including the Ennore LNG Terminal. It had said that LNG would help bring down its dependence on coal-based power projects and help address its energy security.
Officials said that if the GAIL project which is running behind schedule is stalled, the State will have to fully depend on the Ennore LNG project.
Our Delhi Bureau reports: Talking about regulatory hurdles faced in building gas infrastructure, Vivek Rae, Secretary Ministry of Petroleum and Natural Gas, said that sorting out such hurdles are turning out to be a herculean task.
Citing example of protests in Tamil Nadu, he said at the CII conference in New Delhi that it has become a challenge as one has to deal with protests, legal as well as State Government issues.
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