India is working towards increasing the share of natural gas in the energy mix from the current level of 6.3 per cent to around 15 per cent by 2030. A major requirement for increasing the natural gas demand is the development of a nationwide pipeline transmission network. To this end, a trunk network to connect the entire country is in the works. According to the International Energy Agency, India’s oil demand is expected to increase by almost 50 per cent in 2030. In order to cater to the increasing demand, augmentation of the pipeline infrastructure is required. With regard to the water supply pipeine network, municipalities and urban local bodies are taking various steps to increase the coverage and 24×7 water supply, and increase pipeline connectivity. The oil and gas, and water sectors have a positive outlook in terms of pipeline construction and offer ample opportunities to their stakeholders. Indian Infrastructure takes a look at the upcoming network under the oil and gas, and water sectors and the opportunities associated with them…
According to India Infrastructure Research, pipeline network lengths of around 20,000 km and 12,000 km are expected to be added in the water and wastewater treatment segments respectively. This are expected to create demand for high density polyethylene, ductile iron, galvanised iron, reinforced cement concrete, steel and pre-stressed concrete pipe manufacturers.
In July 2022, the Gujarat government approved investments worth Rs 17.6 billion to lay pipelines in the state. It includes the construction of a 78 km pipeline worth Rs 15.66 billion from Kasara to Dantiwada under the SujalamSufalam Jal Yojana, and a 33 km pipeline from Dindrol to Mukteshwar worth Rs 1.92 billion. These projects will provide drinking water and irrigation to 135 villages in Banaskantha and Patan districts. As of January 2022, in order to meet the future drinking water needs of Greater Hyderabad, a fourth pipeline would be laid at an estimated cost of Rs 14 billion at Sunkisala, near Nagarjunasagar, which will supply drinking water from the Krishna river. In addition to this, the government is planning to develop a water pipeline network in the Northeast.
Oil and gas pipeline
In order to make natural gas available across the country, the timely completion of the National Gas Grid and North-eastern Gas Grid is essential. India targets increasing the pipeline coverage by 60 per cent or 34,500 km by 2024-25. All states are expected to be connected by a trunk national pipeline network by 2027. According to the Petroleum and Natural Gas Regulatory Board, the total under-construction natural gas pipeline in India stands at 15,543 km (as of June 30, 2022). According to India Infrastructure Research, 36 natural gas pipeline projects with an investment of more than Rs 920 billion are coming up in the country. Of these, 14 projects with investments of more than Rs 18 billion have been announced and 22 projects with investments of Rs 900 billion are under construction. Some of the key under-construction projects are the Kochi-Koottanad-Bengaluru-Mangaluru pipeline, Angul-Srikakulam pipeline, Jagadishpur-Haldia-Bokaro-Dhamra gas pipeline, Mallavaram-Bhopal-Bhilwara-Vijaipur natural gas pipeline, and the north-eastern natural gas pipeline grid project, among others.
Under the National Monetisation Pipeline (NMP), the assets considered for monetisation during 2022-25 are select gas pipelines with an aggregate length of around 8,154 km, of which 7,928 km is from the existing operational pipeline assets and the remaining from pipelines that are expected to become operational during the NMP period. The total assets considered for monetisation account for around 23 per cent of the aggregate pipeline asset base (total gas pipeline network of 35,263 km envisaged as part of the gas grid). However, owing to resistance from PSUs, the plan has been put on hold.
According to India Infrastructure Research, 17 oil pipeline projects with a capacity of more than 59 mtpa and entailing an investment of more than Rs 285 billion are coming up in the country. Of these, seven projects with investments of Rs 155 billion are under construction and 10 projects with investments of more than Rs 130 billion are at announced stages.
Indian Oil Corporation Limited (IOCL) and Hindustan Petroleum Corporation Limited (HPCL) are working to augment and expand their pipeline network. HPCL has three pipeline projects under execution. These are the extension of the Visakh-Vijayawada-Secunderabad pipeline from Vijayawada to a new marketing terminal at Dharmapuri, the Hassan-Cherlapally LPG pipeline project and the Barmer-palanpur pipeline project. Upon completion of these projects by 2022, HPCL’s mainline capacity will increase from 32.55 mtpa to 39.71 mtpa and its network length from 3,738 km to about 5,300 km.
Indian Oil is managing one of the world’s largest oil pipeline networks and working on expanding its network. Its key ongoing projects include the Paradip Hyderabad pipeline project (investment of Rs 33.38 billion), augmentation of the Paradip-Haldia-Durgapur LPG pipeline and its extension up to Patna and Muzaffarpur (investment of Rs 30.28 billion), Koyali-Ahmednagar-Solapur pipeline project (investment of Rs 19.45 billion), Paradip-Somnathpur-Haldia pipeline project (investment of Rs 12.97 billion), Mathura-Tundla pipeline and its extension for hook-up with the Barauni-Kanpur Pipeline (investment of Rs 6.76 billion), crude oil pipeline on the Haldia-Barauni section of the Paradip-Haldia-Barauni pipeline and conversion of existing twin pipelines from crude to other services (investment of Rs 36.96 billion). It also plans to invest Rs 90.28 billion to build a new crude oil pipeline between Mundra and Panipat.