GAIL (India) Ltd will invest over Rs 6,000 crore in Liquified Natural Gas distribution network and power project in Tamil Nadu.

The Chief Minister Ms J. Jayalalithaa said the agreement signed between GAIL and the Tamil Nadu Industrial Development Corporation (Tidco) on Thursday provides for the establishment of a natural gas pipeline network to supply fuel to industries, households and for use as automobile fuel. GAIL will invest in the infrastructure and Tidco will facilitate the implementation of the projects.

GAIL, is a Rs 32,000 crore company in transmission and distribution of natural gas and petroleum gas and gas based power projects. Tidco is a State-run industry development agency.

Addressing the Legislature today, Ms Jayalalithaa said the investments will bring down the State’s dependence on coal and petroleum products as fuel and enable fuel self sufficiency for industrial development. Tamil Nadu needs two LNG terminals each of about 5 million tonnes a year.

An agreement between Tidco and the Central Government Enterprise Indian Oil Corporation in March provides for the oil company to set up a 5 million tonne LNG import terminal near Ennore Port to the North of Chennai. This facility will be ready in 2016 and supply over 18 million cubic metres of fuel daily for industrial, household and automobile fuel use.

The agreement with GAIL provides for the pipeline infrastructure.

Also, GAIL’s LNG pipeline between Kochi LNG import terminal and Bangalore will run 310 km through Tamil Nadu traversing Coimbatore, Salem, Erode, Tiruppur, Namakkal, Dharmapuri and Krishnagiri Districts.

GAIL will implement a Rs 1,000 crore LNG distribution pipeline network to distribute the fuel to consumers. The company will also set up a Rs 500-crore pipeline between Salem and Cuddalore to carry 6 million cubic metres of gas daily. It will also set up a floating storage degasification unit in South Coastal Tamil Nadu at a cost of Rs 2,500 crore.

GAIL and Tidco will also set up a joint venture project for a 500 MW, LNG-based power project at a cost of Rs 2,000 crore, she said. This can be expanded with additional investments of Rs 10,000 crore.

Industrial estate

To facilitate industrial investments, the State Government will create industrial estates with adequate infrastructure to provide a competitive environment for manufacturing sector. The first of the modern industrial zones will come up in Tuticorin over a 1,500-acre area, Vellore 2,000 acres and in Krishnagiri over a 4,000 acre area.

A 1000-acre industrial hub for heavy engineering industries with access to Ennore Port will also be established, she said. The road links to the Port are being upgraded to benefit the industrial units in Oragadam to the west of Chennai, which use the Port for exports.

Industrial infrastructure fund

A Rs 100 crore industrial infrastructure fund will be established to maintain the infrastructure in the industrial estates. Tidco will bring in Rs 80 crore and the State Government Rs 20 crore. This fund will be used to upgrade road link, implement pollution control measures and other basic facilities.

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