City gas distribution project in limbo - The New Indian Express

City gas distribution project in limbo

Published: 01st December 2012 09:26 AM

Last Updated: 01st December 2012 09:26 AM

With virtually no takers, the much-awaited City Gas Distribution (CGD) project for Kochi is running into troubled waters. Laying of pipelines for distribution of natural gas would be the essential and primary task for introducing CGD, pointed out top petroleum officials. However, sources with the GAIL (Gas Authority of India Ltd) confirmed that pipelines have already been laid for 45  km, which can be effectively utilised for CGD.

Speaking to Express here the other day, Petroleum and Natural Gas Regulatory Board (PNGRB) chairman S Krishnan pointed to the need for laying more pipelines to facilitate the initiative. He is of the opinion that the state can look into the possibility of having a tie-up with neighbouring states for implementation of CGD.

“We need to make sure that the natural gas coming to the plant would be distributed and transported to the network effectively and within the time limit. Pipe-laying work should be completed first. Also, the load coming to the plant should be cleared within the stipulated time; if not storage becomes an issue. Cooling and storage of natural gas will be a difficult task,” he said.

When asked about the need to set up a special purpose vehicle (SPV) for CGD, Krishnan said that distribution can be carried out through bidding. He also referred to the possibility of having a tie-up with other states for CGD.

 It has been pointed out that launching a city gas distribution network for a small geographical region may not be feasible. If there is a wide network connecting a couple of cities in neighbouring states, naturally the number of consumers will be high, which in turn make it a more feasible project. “Obviously once the gas plant is set up, the distribution network needs to be strengthened. The CGD needs an elaborate and wide distribution network,” he said. Meanwhile, GAIL sources pointed out that the real crisis is the lack of promoters for the CGD project despite the infrastructure in place.

 “Already pipelines have been laid from Puthuvypeen to Ambalamugal (30 inch pipelines from Puthuvypeen to Udyogamandal and 10 inch pipelines from there to Ambalamugal.) These have been tested and filled with nitrogen, as there is no LNG now. These can be effectively used for the CGD project,” sources said. They said that instead of bidding, distribution can be carried out on a nomination basis. They pointed out that LNG being a relatively new sector for the state, the government should take the initiative to implement the project on a nomination basis instead of going for bidding. 

PNGRB is the authority entitled to lay, build, operate or expand city or local natural gas distribution network in the country. Transportation and regulation of natural gas networks in the country is one of the major functions before the board.

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