Business Today

Kashmir Gas Pipeline: No more a pipe dream

Print Edition: Jan 6, 2013

Jammu and Kashmir has a very fragile relationship with hope and peace. But signs of progress are increasingly visible in the hill state that has been wrecked by two decades of violence. Militancy appears to be on the wane, tourism is reviving, road and rail connectivity with the rest of the country is improving, and business is picking up. Now, a pipeline from Gujarat that will bring natural gas to households and industries in the valley for the first time is raising expectations of the people.

Gujarat State Petronet Ltd (GSPL), a company owned by the Gujarat government, will connect Mehsana in the western state to Bhatinda in Punjab and then to Jammu, Kathua and Srinagar. The entire project will cost an estimated Rs 6,500 crore, says a GSPL executive. The pipeline will pass through one of the most difficult terrains in the country and is likely to begin operations by the middle of 2014. It will be crucial especially in winters when demand for fuel rises after temperatures drop while snowfall disrupts traffic movement.

The pipeline could potentially change the dynamics of the energy-deficient state. It will have transporting capacity of 75 million standard cubic meters of natural gas per day. This gas will replace, to a large extent, the expensive cooking gas and petrol currently used. The state government plans to have city-gas distribution networks in Jammu, Kathua and Srinagar. It also is looking to set up two gas-based power plants to tide over electricity shortages in winters when hydroelectric projects run below their capacities. Chief Minister Omar Abdullah has publicly backed the pipeline project, and said gas will also be available for commercial and industrial purposes.

Rs 6,500 cr estimated cost of Mehsana-Bhatindasrinagar gas pipeline project.

"Good infrastructure is an obvious ingredient for growth and development. Gas could give the impetus required for the state to be part of the growth story," says Umar Tramboo, Director at the Srinagar-based Khyber Group, which runs a bottling unit for cooking gas cylinders as well as a cement factory, a milk processing plant and a flour mill. GSPL received approval from the Petroleum and Natural Gas Regulatory Board to lay the gas pipeline in July 2011. It has set up a joint venture with Indian Oil, Bharat Petroleum and Hindustan Petroleum for the project. A GSPL executive says that the 1,670-km-long first phase, from Mehsana to Bhatinda, is on schedule and that the company has acquired from landowners the right of use to lay the pipeline under the Petroleum and Minerals Pipelines Act.

The 740-km stretch from Bhatinda to Srinagar, however, poses a problem since the central legislation is not applicable in Jammu and Kashmir. A state government official says the state is enacting similar legislation to enable GSPL to lay the pipeline. "The state government has finished the modalities and will present the bill in the next session of the assembly," says the official.

GSPL is also negotiating with the National Highways Authority of India and Indian Railways to lay pipelines along roads and rail tracks, the company executive says. The local business community is hopeful the pipeline will benefit the state. "We don't expect our region to become an industrial hub like Gujarat, but access to gas will help the businesses grow at a rapid pace," says Dinesh Mahajan, who owns a glass unit in Jammu and also has business interests in Udhampur and Kathua.

"This is the initial stage of rebuilding the state," says Waseem Trumboo, who owns a cement unit in Srinagar and is the president of the Confederation of Indian Industry's state council. "Soon progress will return."
Anilesh S. Mahajan

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