Reliance Gas Transportation Infrastructure Limited (RGTIL) will lease out 25 percent of space on its East-West Gas Pipeline to third parties. This pipeline ferries natural gas from Kakinada in Andhra Pradesh to Bharuch in Gujarat. The pipeline carries the natural gas found from Reliance Industries Limited (RIL)’s KG-D6 basins located in the Bay of Bengal.
The common carrier capacity of this pipeline is 21.25 mmscmd. This was recently announced by oil regulator Petroleum & Natural Gas Regulatory Board (PNGRB). The common carrier capacity of any infrastructure project is the capacity which can be leased out to third parties. An order was recently used by PNGRB which mentions that the maximum achievable capacity of 1,460 km long East-West Pipeline to be 85 mmscmd under stable conditions. The diameter of the pipeline also varies from 8 inches to 48 inches.
Out of this 85 mmscmd, 21.25 mmscmd capacity will be available for third parties. The third party has to pay an approved transportation tariff to PNGRB before using this capacity. Furthermore, as per the order, RGTIL will get INR 15 per million British thermal unit to INR 60.94 per mmBtu as transportation tariff for varying length of distance.
A prior approval by RGTIL must be taken from the oil regulator for creation of any lien, charge or hypothecation on the pipeline to secure finances for the project. It has to provide all the details regarding the usage of funds too. In case of raising funds from any financial institutions, the board should be informed within a week from the date of funds sanctioned.
This East-West Pipeline which originates from the landfall point of KG-D6 gas transports gas to customers up to Gujarat. Along the way, the gas pipeline passes from Karnataka and Maharashtra. The gas it carries is gathered at Onshore Terminal at Gadimoga near Kakinada. KG-D6 basins owned by Mukesh Ambani led RIL is located at 50 -60 km offshore on the eastern coast of India. RIL is trying to expand its production of natural gas and petroleum by deepening the existing wells and also finding new reserves to cater to the demand of natural gas in fertilizers and power producing companies. KG-D6, along with Oil and Natural Gas Corporation and Gujarat State Petroleum Corporation are the major gas blocks which are situated near each other in the eastern coast. These blocks are the major sources of natural gas and petroleum for the country. The vision of Mukesh Ambani behind increasing the production of natural gas and petroleum in KG-D6 blocks is to make India self- sufficient in terms of demand and supply of these conventional sources of energy. It will make India import-independent.