Centre weighs national gas highway

The government is planning to boost use of clean fuel by reaching out to unserviced areas through a national gas highway. India’s gas production has been ramped up after the D6 Block of Reliance Industries in the Krishna-Godavari Basin started to pump it out.

The market of natural gas has so far been restricted only to a few metros and key towns.
“With the increase in availability of natural gas in the country and to ensure supply of natural gas to unserviced areas, the government proposes to develop an institutional mechanism for development of long-distance gas highways leading to a national gas grid,” petroleum and natural gas minister Murli Deora informed the Parliament on Thursday.

India currently has around 10,000 km gas pipeline network. State-owned gas transportation major GAIL (India) Ltd operates around 7,000 km pipelines, and is planning to add another 5,000 km in a few years. Most gas pipelines are currently in the northern and western region, and there is need to develop networks in southern, eastern and central regions.

The country currently produces around 120 mcmd gas, which includes around 44 mcmd from Reliance Industries Ltd’s D6 Block. D6 output is expected to rise to 65 mcmd by December and 90 mcmd by March. The country’s gas demand is currently around 180-200 mcmd.

Separately, minister of state for petroleum and natural gas Jitin Prasada said GAIL is currently selling around 81 mcmd gas in the country. The government plans to build 500-600 km gas pipelines every year under the proposed national gas grid.

The government is also proposing to set up an apex planning body and regulator, the National Gas Highway Authority, on the lines of National Highways Authority of India, which will oversee laying of major gas pipeline projects.

“It is envisaged that the National Gas Highway Authority would plan, develop, manage and regulate the gas highways and concentrate on planning the development of gas pipeline infrastructure, especially in remote and under-developed regions, leading to a national gas grid,” Deora said in a written reply to a query. The government is planning to start gas supplies for transportation and cooking in 201 new towns by 2015.

Earlier this week, petroleum secretary R S  Pandey had said government is exploring various modalities to raise funds for gas pipeline infrastructure, which could include public funding and public-private partnership model.

Deora also said the government is seeking some amendments to strengthen the downstream regulator in the oil and gas sector, Petroleum and Natural Gas Regulatory Board, for issuing gas distribution project licences in cities. “Certain amendments are proposed in the Petroleum and Natural Gas Regulatory Board Act, 2006, to adequately empower PNGRB to perform the desired functions and to remove ambiguities,” he said.