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Gail: LPG transportation

May 25, 2001

The gas transmission and distribution major, Gas Authority of India Ltd. (GAIL), has run up on the bourses over the last two months. The scrip price has increased by 25% to Rs 59 over this period while the Sensex has gained 1%.

The company has recently announced the completion of its liquefied petroleum gas (LPG) pipeline from Jamnagar, Gujarat to Loni, Uttar Pradesh. The pipeline traverses a distance of 1,270 kms and is the longest LPG pipeline in the world.

The pipeline will pass through Gujarat, Rajasthan, Haryana, Delhi and Uttar Pradesh. Evacuation facilities are available at Ajmer and Jaipur in Rajasthan, Piyala in Haryana, Madanpur-Khadar in Delhi and Loni in Uttar Pradesh. The LPG will be supplied to the oil marketing companies Indian Oil Corp. (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) to be bottled and distributed to the domestic and commercial customers.

The pipeline has been set up at a cost of Rs 12.5 bn with a forex component of Rs 3.9 bn. The company has already commenced pipeline operations and has transported 150,000 tonnes of LPG. GAIL is expected to augment capacity on the pipeline from the current 1.7 m tonnes to 2.5 m tonnes in phase - II of the project (2011 - 12).

The LPG is sourced from the Reliance Petroleum (RPL) refinery at Jamnagar and from IOC at Kandla. In phase - II the company plans to extend the pipeline to Kandla. This would help the company transport the LPG, sourced at the port, through pipeline to the Jamnagar - Loni link.

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