GAIL delays pipeline building on slow economy

“Overall economic sentiments are down,their (user industries’) margins must be under pressure… when the economy is down everybody feels the heat,” chairman BC Tripathi said.

Economic growth in India,the world’s fourth-largest energy consumer,languished near its slowest in three years at 5.5 per cent in the quarter that ended in June and industrial output in August slowed to 0.6 per cent.

GAIL now cannot find clients for gas even at about $15 mmBtu,down from previous sales at $20 per mmBtu,because of the economic slowdown,Tripathi told a news conference.

That,combined with shrinking domestic supplies,has forced the state-run company to delay by one to two years plans to lay 4,000 kilometres of pipeline,Tripathi said. “We are saying that we will build pipelines in synchronisation of supply of gas,” he said,adding GAIL will still build branches to main pipelines to help transmit gas to user industries where required.

GAIL,which own 11,000 kilometres of pipeline network,is currently transmitting gas at a rate 100 million cubic metres a day (mmscmd) compared to a capacity of 210 mmscmd as supplies from Reliance’s D6 block have almost dried up,Tripathi said.