East India Pipe Project to get State Funding

The Government of India on September 21 said it will partially fund an ambitious gas pipeline project that will connect major states in east India; it is the first time ever that the government has made a capital grant to a natural gas pipeline project.

The Cabinet Committee on Economic Affairs (CCEA) approved capital grant of rupees 51.76bn ($0.77bn), which is 40% of the total cost of the project, over five years. The total cost of the Jagdishpur-Haldia and Bokaro-Dhamra (JHBD) gas pipeline is estimated to be roughly rupees 130bn ($1.93bn). 

The 2,539 km pipeline is expected to be completed by December 2020 and will connect the eastern states of Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha. The project will also see city gas distribution (CGD) networks set up by Gail India in seven important towns in eastern India, namely, Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneshwar and Cuttack, the government said. The JHBDPL gas pipeline will be used for gas supply to three fertiliser plants in eastern India, namely Barauni, Sindri and Gorakhpur.

Also September 21, state-owned firms Indian Oil Corporation Limited (IOC) and Gail India on September 21 signed a memo of understanding with Dhamra LNG Terminal Private Limited (DLTPL) to take equity in the 5mn mt/yr capacity LNG receiving, storage and regasification terminal being put up at Dhamra Port in the eastern Indian state of Odisha.

According to the Indian government, the Dhamra LNG terminal project and JHBD gas pipeline project, cumulatively, are expected to bring investments to the tune of rupees 510bn ($7.6bn) into the economy of eastern India. Of this, about rupees 130bn ($1.9bn) will be spent on JHBD pipeline infrastructure; rupees 60bn ($895mn) on CGD projects in seven cities; rupees 60bn on Dhamra LNG terminal and rupees 260bn ($3.9bn) on upgrading the Gorakhpur, Barauni, Sindri and Talcher fertiliser plants.

Shardul Sharma