PSU major Oil India today said it has submitted a feasibility report to the Central government for laying gas pipeline from Barauni in Bihar to Numaligarh in Assam to tackle shortage of gas in the North Eastern state.
"Last week, we submitted the feasibility report to the Petroleum Ministry regarding laying of pipelines from Barauni to Numaligarh.
We have addressed various aspects of gas transportation and its economic viability in the report," Oil India Ltd (OIL) Chairman and MD Utpal Bora said here.
The distance between the two points will be about 750 km, and currently OIL has two pipelines transporting crude and oil between Barauni and Naharkatia in Assam, he added.
"If we want to have a complete new line, then the entire project will have to start from the scratch like acquiring land.
But, as we already have Rights of Use (RoU) agreement with land owners and two pipelines are operational, so the Assam government wants us to implement the project," Bora said, adding ideally GAIL should carry out the work.
He said if the government gives nod to the report, OIL may form a joint venture with GAIL as they have the expertise in this field.
Giving details about the feasibility report, Bora said it studied the possibility of setting up a third pipeline in the route, which has 18 metres of width as per the RoU.
"The economic viability option has also been looked at in the report. It takes Rs 4 crore for laying one kilometre of pipeline. So, if it is not economically viable for any entity, then we have suggested the government to provide us assistance in terms of viability gap funding, which would be about Rs 40 crore," he added.
The report also dealt with other consumer related issues with availability of gas in Assam like setting up CNG fuel stations and providing pipe LPG to each household, Bora said.
Also, some portions of the land have been encroached by people at different places and these have to be cleared before starting any work, he added.
"The current requirement is 10 mmcmd (million cubic meter per day) and there is a shortage of 2 mmcmd. So, this project is very important to Assam. As we already have the RoU, it is easier. However, there are some challenges as well," Bora said without elaborating further.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)