Rs 5,559 cr for Northeast gas grid

New Delhi, January 8

In only the second instance of the government directly funding a gas pipeline, the Cabinet Committee on Economic Affairs (CCEA) today approved a Rs 5,559-crore viability gap funding for the proposed Northeast gas grid, Oil Minister Dharmendra Pradhan said.

However, in the absence of anchor customers, the Rs 9,265-crore pipeline is not economically viable.

The CCEA headed by Prime Minister Narendra Modi approved “a viability gap funding of 60% of the project cost,” Pradhan said at a post-Cabinet press briefing here.

The North-East pipeline grid is to be implemented by Indradhanush Gas Grid, a joint venture of state-owned GAIL India, Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Numaligarh Refinery Ltd (NRL).

The consortium had pitched for a 60% funding support from the government and would raise the rest via equity and debt. Without government support, the pipeline will not be viable.

This is the second time that a gas pipeline project in the country will be funded by the government.

In 2016, the government provided a capital grant of Rs 5,176 crore, or 40% of the project cost of the 2,655-km Jagdishpur-Haldia and Bokaro-Dhamra (JHBDPL) gas pipeline project, which GAIL is currently executing.

GAIL is also laying a 750-km line from Barauni to Guwahati as part of the Rs 12,940 crore JHBDPL project, which is also known as the Pradhan Mantri Urja Ganga’ project. This is proposed to be connected to the North-East via the Indradhanush grid.

All other pipelines in the country have been funded by public or private sector companies. — PTI