Bid & Tender
GAIL India Objects to HPCL’s Gas Pipeline Project

Date : Mar 06, 2017

Hindustan Petroleum Corporation’s plan for a cross country pipeline to move LPG received on the west coast to bottling plants over 600 km away in the hinterland has hit a roadblock with GAIL (India) raising objections to the project.

 

The project, GAIL fears, could mean the end of the road for its pipeline that for more than a decade has been bringing LPG from the port city of Vishakhapatnam, on the eastern coast, to bottling plants in Cherlapalli, near Secunderabad.

 

The resistance is in response to an expression of interest HPCL had submitted to PNGRB, the regulator, earlier this year to lay and operate a liquefied petroleum gas pipeline from Hassan in Karnataka to Cherlapalli, near Secunderabad in Telangana.

 

The oil marketing company proposes to move the product from its Mangaluru LPG import facility. Hassan is one of the injection points on HPCL’s Mangaluru-Hassan-Mysuru-Sollur LPG pipeline. The plan involves laying a 620-km long pipeline from Hassan to Cherlapalli with a tap-off point (TOP) at Anantapur in Andhra Pradesh.

 

HPCL, which has bottling plants in both Cherlapalli and Anantapur, over time wants to supply LPG from Cherlapalli to its facilities in Nagpur and Chandrapur, Maharashtra. In the EOI, the company expected LPG demand to pick up from southern Andhra Pradesh, Telangana and eastern parts of Maharashtra.

 

In its response, GAIL said it had “strong apprehension that in case HPCL’s LPG pipeline comes into existence, HPCL may cater [to] the entire demand of Cherlapalli from the new connectivity.

 

Sooner or later, the other two OMCs may also start utilisation of (the) proposed pipeline.” Besides HPCL’s, Cherlapalli also hosts LPG plants of Indian Oil and Bharat Petroleum Corporation.

 

Thus, it would render the Vishkhapatnam-Secunderabad LPG Pipeline “created at a considerable cost to the exchequer, starved and under-utilised to a major extent.”The 600-km-long facility was readied in 2003 at a cost of around ₹5 billion. GAIL said it is not inclined towards any other pipeline in the region until its pipeline is fully utilised by HPCL and other oil marketing companies. Creation of a new connectivity by HPCL, it said, would result in duplication of infrastructure.