GSPL receives authorisation for three pipelines

A consortium headed by the Gujarat State Petronet Limited (GSPL), a subsidiary of Gujarat State Petroleum Corporation (GSPC), has received the letter of authorisation from Petroleum & Natural Gas Regulatory Board for three cross country pipelines.

The GSPL led consortium was awarded authorisation for the 1,611-km long Mallavaram-Bhilwara, 1,688-km long Mehsana-Bhatinda and the 512-km long Bhatinda-Jammu pipelines. The third pipeline is planned to be extended till Srinagar through spur lines.

GSPL has 52% stake in the consortium which also includes IOCL with 26% stake, BPCL with 11% stake and HPCL with 11% stake. The company had so far concentrated on the state, but the three pipelines signify the company's emergence as a national player in gas transportation.

The pipelines, which will traverse through Andhra Pradesh, Maharashtra, MP, Gujarat, Rajasthan, Haryana, Punjab and J&K, will have the capacity to carry around 95 million metric standard cubic metre per day (mmscmd) of gas. The pipelines are to be completed in 36 months.

“The three pipelines, having length of more than 3,800 km, will be built at an estimated expenditure of Rs12,500 crore. The funds will be raised through a mix of debt and equity in the ratio of 70:30,” said GSPL managing director, Tapan Ray.

Asked how the company plans to raise funds for the pipeline projects, Ray said, “The equity contribution of GSPL for the pipelines will be around Rs1,750 crore, which will be raised through internal accruals. We will not need to dilute any stake for raising funds.”

He added that they have received proposals from various institutions, including IFC, for funding the projects, but a decision about it is yet to be taken.

Ray informed that GSPL will also bid for the 1,700-km Surat-Paradip gas pipeline with its consortium partners. Asked about company's plans in Gujarat, the GSPL MD, said, “We are currently operating over 1,900 km pipeline network in the state. We plan to expand the network to 2,500 km in three years. We aim to cover every district and taluka in the state with the network.”