GAIL to Invest 30K Crore in 3 Years

New Delhi: State-owned Gail India Ltd (Gail) is mulling a capital expenditure Rs 30,000 crore, mainly in pipelines, petrochemical projects and city gas distribution, over the next three years, while its total capital expenditure for FY23 was Rs 10,000 crore. However, Gail is also hoping that its natural gas transmission volumes to expand 12 per cent and polymer sales to double this financial year, a top official in the company said on Wednesday.

Speaking to the shareholders at the company’s annual general meeting (AGM), Gail chairman and managing director Sandeep Kumar Gupta said that the firm had a Rs 10,000 crore capex in the 2022-23 fiscal (April 2022 to March 2023) and the company is growing steadily, creating infrastructure facilities across the nation. “We are targeting to incur a capex Rs 30,000 crore in the next 3 years, mainly on pipelines, ongoing petrochemical projects, city gas distribution or CGD projects, operational capex, equity contribution in group companies etc,” said Gupta.

Besides, the country’s top oil & gas major is looking at liquefied natural gas (LNG) as a transport fuel, joining Essar-promoted GreenLine, which operates the nation’s largest LNG-powered fleet of heavy commercial vehicles. “The company expects its natural gas transmission volumes to expand 12 per cent and polymer sales to double this financial year. With 15,600 kilometres of pipelines under operation and about 4,200 km of pipelines under construction, we will complete around 20,000 km of the national gas grid in the next calendar year,” the Gail chairman said.
 
The company has also won the licence to lay, build and operate the 160 km Gurdaspur-Jammu natural gas pipeline. With this, the company shall be enabling access to natural gas to the northern as well as north-eastern parts of the country also, through the Barauni-Guwahati pipeline (BGPL) (729 km) section as an integral part of Jagdishpur-Haldia & Bokaro-Dhamra Pipeline (JHBDPL).

“With India's increasing petrochemical demand, India is projected to contribute more than 10 per cent of the incremental global growth in petrochemicals over the next decade.  As Gail recently acquired private-sector chemical company JBF Petrochemicals, adding 1.25 million tonnes of petchem capacity, this acquisition offers an opportunity to add a new chemical product, purified terephthalic acid (PTA) to the firm’s existing product portfolio,” he said.

“Your company is also implementing 500,000 tonnes per annum of the country’s first propane dehydrogenation PP plant at Usar and another 60,000 tonnes of polypropylene at Pata. Also, the firm is also setting up its first specialty chemical plant of 50,000 tonnes isopropyl alcohol (IPA) at Usar in Maharashtra. With these additions, your company’s portfolio of petrochemicals/chemicals would become 3 million tonnes per annum,” he added.

Apart from this, Gail’s Strategy 2030 also entails exploring various opportunities for increasing its renewable portfolio through organic as well as inorganic routes. “Towards shaping a net zero future, your company is exploring various business avenues such as solar, biofuels, compressed bio-gas, carbon capture utilisation and storage (CCUS), green hydrogen, etc,” the Gail chief said.

However, Gail is setting up a 10 MW green hydrogen production unit based on PEM water electrolyzers (the largest in India) with a capacity of 4.3 tonnes per day at Vijaipur Madhya Pradesh, which is expected to be commissioned by December 2023. The firm is carrying out studies to see the impact of various levels of hydrogen blending in natural gas.

“In a first-of-its-kind initiative in India, your company is setting up small-scale LNG plants to cater to diversified areas viz., geographic areas not having connectivity to the pipeline, business of LNG as a transport fuel and monetising gas from stranded fields. Gail has procured two liquefaction skids of 16-18 tonnes a day capacity. The skids are portable (plug-&-play type) and scalable liquefaction units and are likely to be commissioned shortly,” he added.