GAIL to supply natural gas to Karnataka from Dabhol

Power-starved Karnataka may have better times ahead, about two-and-a-half years from now, when the 800-km gas pipeline from Dabhol, in Maharashtra, to Bangalore becomes operational.
An agreement was signed by Director (Marketing) of Gas Authority of India Ltd. (GAIL) B.C. Tripathi and Principal Secretary to the Karnataka Government, Infrastructure Development, Arvind Jadhav. Chief Secretary Sudhakar Rao, who was present, said natural gas was a preferred fuel for environmental and economic reasons.

GAIL Chairman and Managing Director U.D. Choubey said, "After the Dabhol power plant begins functioning, there will be almost 2.9 mm tons of gas a year surplus. The pipeline passing through Gokarna and Gadag to Bangalore will bring the gas, which will be made available to the city."
The gas can be purchased by a city utility or industries for captive power plants. Also in the making is another pipeline between Mangalore and Kochi, where 2.5 mm tons of gas will be available. The surveys for the pipelines have been completed.

Asked about the pricing, Mr Choubey said international prices varied from $ 2 to $ 4 per mm units now and had to be worked out, calculating the logistics involved and the availability. GAIL, which has around 7,000 km of gas pipelines in the country, has plans to augment it by 5,500 km, in two phases, both to be completed by 2012.
"These will require funding of nearly Rs. 20,000 crore, and we have committed Rs. 12,000 crore for the first phase. GAIL is cash-rich, but if found necessary, we may go for market borrowings," Mr Choubey said.

The investment would be recovered when a "national gas grid" along the lines of the electricity grids was created.
The gas transmission part of GAIL is being strengthened as the need for gas as an alternative fuel is being felt. Currently the organisation supplies nearly 80 mm cm of natural gas a day as fuel to power plants, gas-based fertilizer plants and to 500 industrial units. GAIL's share of the gas transmission business is 79 %, and the company holds 70 % market share in gas marketing within India.

It is also the only company that owns and operates LPG pipelines. It has a network of 1,300 km of which 600 km is in the southern region. The LPG transmission system has a capacity to transmit 3.8 mm tpy.
Last year, the LPG transmission was 2.75 mm tons. Among its more recent initiatives have been city gas distribution projects for both commercial and domestic use and for the transportation sector.