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Andhra bid to speed up gas hits a bump

business Updated: Sep 27, 2007 21:55 IST
Deepak Joshi
Deepak Joshi
Hindustan Times
Highlight Story

The Andhra Pradesh government's efforts to get early approval for the Krishna-Godavari Gas Network are unlikely to fructify soon.



The petroleum ministry has decided to refer the issue of Rs 4,900-crore gas pipeline to the petroleum and natural gas regulatory board.



Andhra Pradesh Chief Minister YS Rajsekhara Reddy had an hour-long meeting with Petroleum Minister Murli Deora on Wednesday as the 2,054 km project linking 23 cities had been hanging fire for over nine months.



Deora reportedly told Reddy that all the 22 applications for setting up a gas network have been forwarded to the regulator, who has been empowered to decide on the issue. Approval of the Andhra Pradesh application would call for similar demands from others. The regulatory board has not yet become functional, as the government is yet to issue an official notification.



Reddy had last week shot off a letter to Deora to expedite approval of the state-wide natural gas pipeline network to be set up by Krishna-Godavari Gas Network Private Ltd (KGGNL).



He had indicated fears that all the gas produced in the Krishna-Godavari basin would be carried outside the state. "Some unscrupulous elements are actively propagating these fears as our state-sponsored pipeline network is not taking shape. They are also citing the permission granted to GAIL recently for laying pipelines for over 2,000 km, carrying gas of more than 100 million metric standard cubic metres per day (MMSCMD)," Reddy said.



Earlier this year, the state government had set up KGGNL along with Gujarat State Petroleum Corporation (GSPC) holding 26 per cent equity each in the new company, with IDFC Private Equity holding the remaining 48 per cent.



In December 2006, KGGNL applied to the petroleum ministry seeking permission to set up the 2,054-km state gas grid with pipeline diameters of 14, 16 and 18 inches to carry initial quantities of 15 MMSCMD of gas on a 'common carrier' basis from GSPC's offshore discoveries, and possibly from Reliance's D6 block. It had also applied for setting up city gas distribution networks to sell CNG to automobiles and piped gas to households, in each of the 23 cities connected by the state gas grid.



Reddy has sought similar concessions for KGGNL as extended to GAIL. "Any discrimination exercised in favour of GAIL may also be extended to the KGGNL application as we have been eagerly awaiting for delivery of gas from KG basin for many years and our stranded assets have also to be put to commercial use at once," he added.