Mumbai: GAIL India Ltd has announced that it plans to venture in to Orissa at a total investment of Rs15,000 crore. During a meeting with Orissa chief minister Naveen Patnaik in Bhubaneswar on December 16, 2005, Proshanto Banerjee, chairman and managing director, GAIL India, had discussed the possibility of GAIL''s investments in the state. Also present during the meeting were senior officials including Orissa''s chief secretary Sunil.

Officials from GAIL and the state government will soon finalise a comprehensive "energy cooperation agreement", which would pave the way for GAIL''s investments in Orissa.

GAIL has been actively pursuing surface coal gassification (SCG) opportunities in India, with Shell as the technology provider and UDHE as the DFR consultants. Talcher has been identified as a suitable location in Orissa and the project implementation would involve an estimated investment of about Rs2,000 crore. The project would convert 4,400-tonnes per day of coal into valuable syn gas, which can feed a 4500-tpd urea plant. Alternatively, the syn gas can also be used for power generation.

The state government has been keen to involve GAIL in a grassroots power plant in the state involving investment of around Rs4,000 crore, which is interested in being a fuel supplier.

GAIL has carried out detailed market studies for natural gas in Orissa and has completed a DFR for a high pressure 1,140km trunk pipeline between Kakinada and Haldia, which would cover Balasore, Bhadark, J K Road, Cuttack, Khurda, Janzam (Behrampor) in Orissa.

The pipeline is planned to be implemented in synchronisation with gas supplies and would involve investment to the tune of Rs4,000 crore. This pipeline would feed spur pipelines to various mega steel industries, fertiliser plants, small and medium scale industries in the state. In addition, the gas pipeline would pave the way for city gas distribution projects in the state of Orissa to bring CNG and piped natural gas to cities and towns in the state. The state government has indicated its preference for Cuttack and Bhubaneswar.

Banerjee said that GAIL is a partner and a preferred buyer of gas from the A-1 block in Myanmar, which has announced a commercial discovery of 4 TCF last year, and disclosed that a feasibility study is being undertaken by the company for transporting the A-1 gas by special ships equipped to carey CNG to a suitable port in the east coast.

The Orissa government has expressed its preference for reserving a dedicated bund in the upcoming port at Dhamra in northern Orissa for this as it would improve the viability of using the gas by avoiding expensive mooring systems and also provide an import point close to the shore.

Another proposal to set up a mega petrochemicals complex at an investment of Rs5,000 crore was also discussed between Patnaik and Banerjee and the names of some major multinationals were also discussed.

While GAIL would implement the gas pipeline project on its own, other projects will be implemented in partnership with other companies and the state government. Patnaik has said that a multi-disciplinary task force would be set up by the government to facilitate implementation of each of these projects on a priority basis.