NEW DELHI: "We have made a proposal for setting up a national gas grid on the lines of the national power grid to ensure better utilisation of the pipeline infrastructure. This would not only mean lower transportation costs but lower prices for consumers," GAIL chairman Proshanto Banerjee told reporters on the sidelines of the Petrotech 2003 conference here Saturday. "Price is a major factor in India despite the fact that there is a tremendous gap between demand and supply, which is just around 50 percent at 60 million cubic meters per day," said Banerjee. With several companies including private conglomerate Reliance Industries planning to set up gas pipeline networks across the country, Banerjee said this could result in sub-utilisation of the infrastructure. Reliance Industries struck the biggest gas reserves in 2002 estimated at seven trillion cubic feet. "The country cannot afford any infrastructure that is sub-optimal. If each of the projects were to come up, it would lead to sub-optimal utilisation of the facility," he maintained. GAIL is also in talks with Reliance for transporting gas from its offshore blocks in Krishna-Godavari basin on the east coast. "We are hopeful of a favourable outcome," said Banerjee. Reliance is, however, keen to set up the pipeline infrastructure on its own, according to official sources. In December, India set up a committee to study various issues related to gas prior to formulating a national gas policy. This committee of four ministers is expected to examine issues related to prices, transportation and infrastructure in view of plans to import gas through various modes. Banerjee has urged the government to appoint GAIL as the nodal agency for laying and operating all gas pipeline networks. Queried whether this would not lead to a conflict of interest, Banerjee said there were several international models that could be adopted as in the case of British Gas, which has a separate subsidiary to look after transportation and supply functions. GAIL is an equity stakeholder in Petronet LNG Ltd that is setting up a liquefied natural gas (LNG) receiving and regassification terminal at Dahej in Gujarat. It is, therefore, keen that the pricing and infrastructure policy should be put in place at the earliest to ensure a more market friendly price for consumers. Eyeing mainly fertiliser and power plants, Banerjee said the market would not accept gas priced over $3.5 per million British thermal units. India has committed to purchase five million tones of LNG per annum from Qatar beginning December this year. From 2007, another 2.7 million tones of LNG per annum is to be imported at another terminal planned at Kochi in Kerala.
Source: IANS