North East Gas Grid Project

• In only the second instance of the government directly funding a gas pipeline, the Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a ? 5,559 crore viability gap funding of 60% for the proposed northeast gas grid.
• About 20% of India’s natural gas production comes from the North-East. Out of about 75 million standard cubic meters per day of gas output, 15 mmscmd come from North East. Currently, Assam, Arunachal Pradesh and Tripura have established gas production potential while there are possibilities for the same in Nagaland and Manipur.
• The 1,656-km North-East Natural Gas Pipeline Grid will connect Guwahati in Assam to major cities in the region such as Itanagar, Dimapur, Kohima, Imphal, Aizwal, Agartala, Shillong, Silchar, Gangtok, and Numaligarh.
• The pipeline will enable the supply of piped cooking gas to households and CNG to automobiles, besides fuel to industry. However, in the absence of anchor customers, the ? 9,265 crore pipeline is not economically viable.
• 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 per cent 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? 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 ?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.
• The funding support to the gas grid is a part of a broader goal of the government to raise the share of natural gas in the country’s energy mix to 15% by 2030 from current 6.2%.
• The government has envisaged developing the National Gas Grid. At present, about 16,788 km natural gas pipeline is operational and about 14,239 km gas pipelines are being developed to increase the availability of natural gas across the country.
• For effective monitoring of the project implementation, a committee comprising of officials from the Ministry of Petroleum & Natural Gas, Department of Expenditure, Ministry of Development of North East Region, Ministry of Environment, Forest & Climate Change, and Department of Fertilizers, may be formed, which would periodically review the progress in its implementation and take steps to smoothen out any issues in execution.