Thaindian News

Chennai, Oct 19 (IANS) A four-member consortium led by Gujarat State Petroleum Corporation (GSPC) has won the bid for building the natural gas pipeline between Kakinada in Andhra Pradesh and Bhilwara in Rajasthan.

The other members of the consortium are Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL).

“The bids for the pipeline project were opened Monday and GSPC has got the bid,” said Chairman of the Petroleum and Natural Gas Regulatory Board (PNGRB) L. Mansingh.

He was speaking to reporters on the sidelines of Chennai 2020, a seminar organised by the Confederation of Indian Industry (CII).

He said for the first 300 km the consortium has quoted a tariff of one paise, perhaps owing to low demand in that stretch.

An IOC official told IANS on condition of anonymity that the 1,545 km pipeline project is estimated to involve an outlay of around Rs.7,000 crore.

According to him, GSPC will hold 52 percent stake, IOC 26 percent, HPCL and BPCL each holding 11 percent each.

He said a special purpose vehicle will be incorporated and the mix of equity and debt for the project will be finalised later.

“The bids were opened only yesterday (Monday). There are several other steps that have to be taken. We have to get the firm order from the regulator,” he said.

This is the first pipeline to be awarded after the PNGRB has been set up.

Confirming that IOC has proposed to supply liquefied natural gas (LNG) to Madras Fertilisers Ltd (MFL), he said: “We are yet to get a response from MFL.”

IOC has proposed to build an LNG terminal and a 1,000 MW power plant at Ennore. The idea is to have the power plant with Chennai Petroleum Corporation Ltd (CPCL) and MFL as its anchor customers.

IOC has said it is ready to supply gas to its anchor customers by having a floating storage and regasification unit near here so that its LNG terminal project can be speeded up.