Line Extension: Upcoming pipeline network in the oil and gas, and water sectors

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…

Water pipeline

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

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.

Oil pipeline

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.