GSPL to invest 2500 cr

Gujarat State Petronet (GSPL), the gas transportation subsidiary of Gujarat State Petroleum Corporation (GSPC), will invest around Rs 2,500 crore in laying 850 km of gas pipelines in 2008.

"We will expand our pipeline network to 2,000 km from the current 1,145 km within Gujarat. The cost of laying the pipelines would be approximately Rs 3 crore per kilometer," said PPG Sarma, executive director, GSPL.

Of the 850 km pipeline expansion, work has already started on a 300 km stretch, Sarma said.

The company is also in talks with various companies to set up joint ventures for retailing gas to kitchens and vehicles in cities in Maharashtra and Rajasthan. "We have pipeline networks till just about 50 km away from Maharashtra. There are many companies we are talking to," Sarma said, declining to name the companies or the number of cities the company plans to roll out the projects in.

The city gas distribution policy will be finalised by the Petroleum and Natural Gas Regulatory Board, which was notified on October 1. The draft policy however envisages that all gas projects, including city gas distribution and pipeline projects, will be built by a company which wins the project on a competitive bidding process.

This draft policy is thus holding up the approval for the cross country gas pipeline GSPC is laying from Kakinada in Andhra Pradesh to Gujarat. Although the company has called for expression of interests from companies to book capacity in the pipeline, as mandated by the pipeline policy, it is not yet got approval from the regulator, Sarma said.

He however added that the pipeline would not be a duplication of Reliance Industries’ pipeline from Kakinada to Gujarat as GSPC pipeline would go through Madhya Pradesh while Reliance’s was through Maharashtra.

GSPC has yet to finalise the investments and capacity of the pipeline.

The pipeline would transport gas from GSPC offshore gas discovery to consumption centres in Gujarat. The company, which had discovered gas in the Krishna-Godavari basin in 2005, is likely to start production by 2010-2011.

"GSPC will be submitting the field development plan in a couple of weeks, and it will take two-and-half years to three years to bring the gas onshore, and to be supplied to customers," he said.