Bid & Tender
GAIL India Draws Up Rs 300 Billion Capex Plan for Expansion

Date : May 25, 2017

GAIL India said it has drawn up investment plans of Rs 300 billion for expansion. "We have investment plans for Rs 300 billion projects in hand, out of which Rs 80 billion in the coal gasification, 15 billion in city gas and Rs 10 billion in breakwater water project," GAIL Chairman and MD B C Tripathi told reporters. GAIL is also currently executing gas pipelines worth Rs 200 billion and another Rs 100 billion worth of lines are under various stages of evaluation.


The pipelines under execution include Jagdishpur-Haldia line that will take the environment friendly fuel to the east. Current projects will be completed by 2019-20, taking GAILs pipeline network to 15,000 km from the current 11,000 km, Tripathi said. The company has already spent capex of Rs 21.80 billion in FY17 and plans to spend Rs 42.61 billion in FY18 and Rs 77.04 billion in FY19 towards setting up of pipelines, petrochemical and process plants, he said.


Among the other ambitious project, the company along with HPCL is setting up 1.7 million tonnes petrochemical plant in Andhra Pradesh. The financial appraisal has been done and six months from now, the investment decision will be taken, he said. Tripathi said the Dabhol power project (in Maharashtra) is being demerged by separating power and liquefied natural gas (LNG) units. GAIL will get charge of the LNG block, while state-owned power producer NTPC would be the largest shareholder in the power block.


"We have tendered for building breakwater and it should be complete by 2019. The LNG terminal will then operate at its full capacity," he said. The company reported 69 per cent drop in fourth quarter net profit of Rs 2.6016 billion as it wrote down the value of its investment in Dabhol power plant. The company took an impairment of investment in Ratnagari Gas and Power Pvt Ltd (the company that runs Dabhol power plant) for Rs 7.83 billion, he added.


With the growth of the country's economy, demand for natural gas has huge potential, Tripathi said, adding that the company has taken up synchronised development of seven city gas distribution network (CGD) projects at Varanasi, Patna, Jamshedpur, Kolkata, Ranchi, Bhubaneswar and Cuttack. For long term energy security, the first LNG terminal at the east coast is also coming up in Dhamra in Odisha under a joint venture of public and private sector companies.


Following the revival of 3 fertiliser plants located at Gorakhpur, Barauni and Sindri, gas demand will be met through companies' supply, he added. "The company is also looking at reducing interest burden by repaying loans. We have brought down the debt from Rs 110 billion to Rs 50 billion. "In the current year, the company hopes to repay another Rs 30 billion, which will help us to reduce interest burden and improve profitability in the years to come," added Tripathi.