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Government approves over Rs 5000 crore fund for North East natural gas grid project

The Natural Gas Pipeline Grid will connect Guwahati in Assam to other major cities in the region such as Agartala, Aizawl, Kohima, Imphal, Dimapur and Itanagar.

Jan 9, 2020 12:34 IST
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The Government has approved 'Viability Gap Funding' worth Rs 5559 crores to set up a natural gas pipeline grid in the North East. The Cabinet Committee on Economic Affairs gave its approval to the project on January 8, 2020.

Under the project, a capital grant worth Rs 5559 crores will be provided to Indradhanush Gas Grid Limited to build a natural gas pipeline grid covering eight north eastern states.

This is the second such funding approved by the Union Government for a gas pipeline project.

Viability Gap Funding

The sanctioned funding will cover 60 percent of the total cost of the natural gas pipeline project. The total expenditure of the grid project is expected to be around Rs 9256 crores.

The funding will help natural gas supplies reach different kinds of consumers such as Industrial, CNG (Transport) and PNG (Domestic) and substitute the liquid fuels.

The Union Ministry of Petroleum and Natural Gas will identify major milestones for the project and link the same for the release of capital grant.

North East Natural Gas Pipeline Grid: Key Highlights

The Natural Gas Pipeline Grid will be developed in the eight states of the north east including Sikkim and the seven sisters- Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.

The total length of the pipeline will be 1656 km. It will connect Guwahati in Assam to other major cities in the region such as Agartala, Aizawl, Kohima, Imphal, Dimapur and Itanagar.

The pipeline grid will bring reliability and ensure uninterrupted natural gas supply to the consumers, which otherwise gets majorly affected in the north east due to several reasons.

The Government will be setting up a committee comprising officials from various central departments such as Petroleum and Natural Gas Ministry, Expenditure Department, Environment Ministry, Department of Fertilizers and the Ministry of Development of North East Region to effectively monitor the implementation of the project.

The committee will be required to review the progress of the grid project from time-to-time and take steps to sort out any issues faced during the execution stage.

Benefits

The availability of natural gas across the north east will help boost industrial growth in the region.

It will also be environment-friendly and would offer a better quality of life to people due to the use of cleaner and green fuel and reduction in the usage of wood and kerosene.

It will also boost production and exploration activities in the region and help connect regional gas sources with pipeline network for early monetisation of natural resources in the region.

It will also open the possibility of installing bottling plants for LPG in the region to reduce transportation costs. The uninterrupted supply of LPG will bring energy security to the people living in the region.

Background:

The Natural Gas Pipeline Grid project is a significant step towards achieving the central government’s Hydrocarbon Vision 2030 for the North-East.

The Government aims to bring in a gas-based economy and increase the share of natural gas in the country’s energy mix. For the same, the government has been taking several steps to enhance domestic gas production and enable expeditious development of gas infrastructure including pipelines, city gas distribution networks and re-gasified liquefied natural gas terminals and development of a gas market by giving access to gas infrastructure.

The Indradhanush Gas Grid Limited (IGGL) has been set up as a joint venture company of five CPSEs – ONGC, IOCL, OIL, GAIL and NRL to develop and operate natural gas pipeline grid in the north east. It was set up in 2018.  

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