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State Drags Its Feet over LNG Project

  • It’s only a matter of time before Liquefied Natural Gas flows through the veins of Karnataka. For, the Gas Authority of India Ltd (GAIL) is all set to supply gas to the State by March-end this year.But the State government is yet to take forward the proposed project in Bidadi – touted as the first gas-based power project proposed in the country 12 years ago.After much delay GAIL finally signed a Gas Co-operation Agreement with the State Infrastructure Development Department in 2009 to develop natural gas distribution and city gas infrastructure, signalling the fact that gas supply would indeed be a reality.

  • Work is in steady progress in the nine districts in Karnataka where the pipeline is being laid. Murali Mohan, DGM, Constructions, GAIL, Bangalore, said that almost 60 per cent of the main line has been completed and that the 745 km-stretch will be completed by March 31. The entire pipeline is however 1,400 km in length. “We are certain about meeting the deadline by the end of March. Even if we were to stretch it a bit, we will surely complete it by June. Our clientele is growing by the day and we have consumers located across the State, including Hubli, Belgaum, Bidadi and Whitefield, apart from Karnataka Power Corporation Ltd (KPCL). “The remaining 650 km comprises branch lines and they will be finished in a phased manner. But finishing the main line is important for the supply of gas,” the official added.But, KPCL which is the implementing agency of the Bidadi project, hasn’t even called for tenders for setting up the plant where LPG supplied will be converted to gas to produce energy.

  • KPCL is also yet to sign a Memorandum of Understanding with GAIL for purchase of gas.ComplacencyThe government has remained complacent and has eluded the setting up of the project.No officer who handled the project will give a direct reply as to why the project has not materialised. Fluctuation in gas prices, non-availability of gas, non-laying of pipe from Dabhol etc., are cited as reasons for the delay.After “much introspection” KPCL decided to scale down the project from 2,100 MW to 1,400 MW in August 2010, which was further downsized to 700 MW last June.

  • Officials said that producing energy from gas presently would cost between Rs 12 to Rs 15 per unit. KPCL is “hoping for the prices to stabilise in the next five years”, by which time it thinks it can produce energy at Rs 5 per unit. Officials also said the department had taken it easy, as it seriously doubted GAIL finishing its project in time.

Tender bid

  • KPCL is said to call for tenders for the plant construction in March.Officials said that pre-qualification tenders had been called for in August 2010 and that those finalised in the list will be invited to participate in the final tenders to be called for in March.Works on the plant construction will begin in June, while a three-year deadline will be set.
    The pipeline between Dabhol and Bangalore will pass through the districts of Ratnagiri and Kolhapur in Maharashtra, Belgaum, Dharwad, Gadag, Bellary, Davangere, Chitradurga, Tumkur, Bangalore and Ramanagar in Karnataka, apart from north and south Goa.The Rs 4,600-crore project will bring in 16 million metric standard cubic meters per day of natural gas.

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