CCEA approves Rs5,559-cr capital grant for North East gas grid

The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a Rs5,559-crore capital grant as viability gap funding to Indradhanush Gas Grid Limited for setting up the North East Natural Gas Pipeline Grid.

The viability gap funding will meet 60 per cent of the estimated cost of Rs9,265 crore (Including interest during construction) of the project. The quantum of VGF would be capped at 60 per cent of estimated project cost and would not be linked with upward capital cost variation, says a CCEA release.
Ministry of petroleum and natural gas will identify milestones for major activities for this project and link the same for releases of capital grant of the project. 
For effective monitoring of the project implementation, a committee comprising of officials from ministry of petroleum and natural gas, Department of Expenditure, ministry of development of north east region, ministry of environment, forest and climate change, and department of fertilizers, may be formed. The committee would periodically review the progress in implementation of the project and take steps to smoothen out any issues in execution.
The gas pipeline will have a total length of 1,656 km spanning the eight states of the North-Eastern region, ie, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.
The capital grant will provide natural gas supplies to various types of consumers, viz, industrial, PNG (domestic), CNG (transport) etc and would immensely help in substituting liquid fuels. The pipeline grid would ensure reliability and uninterrupted natural gas supplies to the consumers which otherwise gets severely affected due to various reasons in this part of the country.
Availability of natural gas across the region is expected to boost industrial growth without impacting the environment and would offer better quality of life to the people in general due to use of cleaner and green fuel.
Besides, the gas grid will have socio-economic and environmental benefits like:
  • Development of industrial climate in the eight states of the north-eastern region;
  • Reduction in the usage of kerosene, wood etc due to increased usage of environment friendly fuel thereby improving the environment in the region; and
  • Improvement in the standard of living of peoples living in the region.
Besides, the gas grid will boost exploration and production activities and connect regional gas sources with pipeline network for early monetisation of natural resources in the region.
It will also open up possibility of installing bottling plants for LPG, besides the supply of LPG and other value added products in the region, which will bring energy security to the people in the area.
Indradhanush Gas Grid Ltd (IGGL) is a joint venture company of five central public sector enterprises, namely IndianOil, Oil and Natural Gas Corporation, GAIL, Oil India and Numaligarh Refinery Ltd. The joint venture was incorporated in August 2018 to develop and operate a natural gas pipeline grid in the North East.
“The Capital Grant will provide natural gas supplies to various types of consumers, including Industrial, PNG (Domestic), and CNG (Transport), among others, and would help in substituting liquid fuels. The pipeline grid would ensure reliable and uninterrupted natural gas supplies to consumers who are otherwise severely affected due to various reasons in this part of the country,” the release stated.
“The possibility of installing bottling plants for LPG can be explored to reduce transportation costs. Uninterrupted supply of LPG and other value-added products can be ensured in the region, which will bring energy security to the people in the area,” the release added.