GAIL Current Affairs - 2020

Cabinet approves North East Natural Gas Pipeline Grid

On January 8, 2020, the Cabinet Committee on Economic Affairs approved the North East Gas Pipeline Grid. The pipeline is to be constructed for around 1,656 km.

Highlights

The gas pipeline grid is to be developed in eight states of the North East Region namely Manipur, Meghalaya, Assam, Arunachal Pradesh, Mizoram, Sikkim, Nagaland and Tripura. The project is a joint venture of 5 Public sector units namely ONGC (Oil and Natural Gas Corporation Limited), IOCL (Indian Oil Corporation Limited), OIL (Oil India Limited), GAIL (Gas Authority of India Limited) and NRL (Numaligarh Refinery Limited). The Joint Venture has been named IGGL (Indra Dhanush Gas Grid Limited).

The Government of India has approved Rs 5,559 crores funding for the construction of the grid. The grid will connect major cities of the North East namely Guwahati, Itanagar, Kohima, Dimapur, Aizwal, Imphal, Shillong, Agartala, Silchar, Numaligarh and Gangtok.

About the Grid

The Grid will supply CNG to automobiles, cooking gas to households and fuel to industry. The Group Consortium will receive 60% of the funding for the project and the rest has to be raised via debts and equity. The project will be monitored by the Ministry of Petroleum and Natural Gas. The Ministry will also release capital for the project in further stages.

India receives first shipment of cheapest LNG from Gazprom Russia

On June 4, 2018, India received first shipment of its so far cheapest Liquefied Natural Gas (LNG) from Russian supplier Gazprom. The LNG has been delivered at a price close to USD 7 per million British Thermal Unit (mmBtu). This price is around 1.5 USD cheaper from the LNG imported from Qatar, which is India’s oldest and largest supplier of LNG. This price is also 1-1.5 USD per mmBtu cheaper than the LNG sourced from Australia and United States.

India’s Natural Gas Production and Import

According to official data, India’s total natural gas production in 2017-18 was 32.64 billion cubic meter of which 22.01 BCM is offshore production while 10.63% is onshore production. The natural gas production in India has fallen in recent years as shown in below graphics:

However, at present, close to half of Natural Gas demand is fulfilled by imports. India’s natural gas import dependence in 2016-17 was close to 45%. At present, India is fourth largest importer of LNG.

Natural Gas is one of the key inputs for generation of power and manufacturing products in fertilizer and steel industries. The current government policy also pushes towards a gas-based economy by raising the share of environment friendly fuel in the energy basket to 15 per cent from current 6.2 per cent.

India’s Gas Deals

At present, Qatar is biggest supplier of Natural Gas to India. The recent shipment from Russia has come under a 20 year deal between India’s State-owned gas company GAIL India Ltd and Russian supplier Gazprom. A few weeks before India had also imported its first ever LNG cargo from US under a long-term import deal. The government policy is to expand the LNG import basket to meet any contingency due to geopolitical or economic reasons.