Kolkata: The northeastern region of India seems to be a forgotten land as far as economic prosperity and profit-making are concerned. But given its rich natural gas reserves of 190 billion cubic metres, it holds immense promise for the future.

The Gas Authority of India Ltd (Gail) has developed a two-pronged gas sector development strategy for the northeast. This was unveiled by Gail chairman and managing director Proshanto Banerjee in his presentation at the North East Business Summit held in Mumbai last week.

According to Banerjee, the two plans would be followed as part of this strategy, namely the Gas Reserve Build Up Plan and the Gas Market Build Up Plan, mainly to explore and develop gas resources in the region. The strategy would also entail constitution of joint groups, comprising state government representatives, industry, oil and gas companies.

The gas resource development plan would involve coordination of available potential market and infrastructure, such as refineries, chemicals and petrochemicals plants, power plants and gas distribution pipelines.

The market development strategy would entail adoption of a regional development model. This would involve dispersion of power and fertiliser plants to create anchor-load scatter to support trunk gas pipeline. Anchor load would be located near state capitals. Studies are on to assess the possibility of loads in neighbouring countries.

Gail is a natural gas company integrated in energy and petrochemicals. And is ranked among Indias top 10 companies and is the largest gas transmission and marketing firm with more than 92 per cent market share. During the financial year 2001-02 it clocked a turnover of Rs 10,763 crore and a net profit of Rs 1,171 crore.

Gail had a market capitalisation of Rs 6,420 crore. It owns and operates north Indias only petrochemicals complex with a cracker capacity of 3 lakh tonnes per year. It has the worlds longest exclusive LPG pipeline of 1,230 kms, from Jamnagar to Loni.

Currently there is a demand supply gap in the natural gas scenario in India, to the tune of 81 MMSCMD. Projections by Hydrocarbon Vision 2025 reveal that this gap is going to increase in the coming years to 167 MMSCMD in 2006-7 to 235 MMSCMD in 2011-12 to a yawning 307 MMSCMD in 2024-25. The current natural gas consumption is 5.41 MMSCD.

According to Banerjee, the northeast holds unlimited opportunities for the natural gas sector. These are:

• Prospective hydrocarbon basins in Upper Assam and Arakan Fold belt

• Estimated hydrocarbon resources of 5 billion MTOE, which means 18-per cent hydrocarbon resources of India

• Prospective regional integration with Bangladesh, Myanmar, Bhutan and Nepal.

• Strong existing facilities of four refineries and oil pipelines. LPG plants have been set up by Gail and OIL

• There are 40 oil and gas fields.

Gail, according to Banerjee, has played a supportive role in the development of the northeast, and has made an investment of Rs 294 crore. Gas pricing is also subsidised in this region.

This presentation was made at the North East Business Summit in Mumbai on 19 and 20 July. The Principal organisers were the Department for Development of North-eastern Region and the Indian Chamber of Commerce (ICC), while the apex partner chamber was FICCI, and the local coordinating chamber was Indian Merchants Chamber in Mumbai.

This joint initiative is the first of a series of steps that ICC would be carrying out in the months ahead to promote the competitive advantages of the northeast.