Dhirubhai and Deendayal wells fuelling Gujarat’s dreams

The talk about Gujarat fuelling growth in a recession period is not all gas. The fuel for this growth is natural gas. What has been a trickle so far is going to gush in with gusto in the coming weeks, straight from the Krishna-Godavari basin and through the Kakinada-Hazira pipeline. While the Japanese seem to be the most excited in the world about the potential of investments in Gujarat, it was a Chinese firm which built this Rs 8,000-crore pipeline for Reliance Industries Limited. By March 2009, when 30 million standard cubic meters per day (MMSCMD) of gas starts flowing in the first phase, Gujarat will start realising its dreams through a gas-propelled economy. The pipeline will attain peak capacity of 120 MMSCMD in about 12 months. Nobody is sure how much gas Gujarat will get out of the Reliance pipeline. The matter is caught up in a political quagmire in New Delhi. But Gujarat would hope to get a good share of gas at the end of the pipeline in Hazira so that industrialisation gets a booster dose. Further down the line, in 2011, Gujarat State Petroleum Corporation (GSPC), the most precious among Gujarat’s PSUs, will start flowing in 10 MMSCMD of gas to Gujarat through the Reliance pipeline. The Reliance wells in K-G Basin are named after Dhirubhai Ambani while the GSPC wells are named after Deendayal Upadhyay. Ten MMSCMD of gas would generate revenues of Rs 20 crore per day for the GSPC -- an astounding Rs 7,300 crore per annum. It is no surprise then that the GSPC s valuation, on the basis of just three K-G Basin wells, is Rs 30,000 crore ($ 6 billion). All this gas would replace electricity and supplement the power needs of Gujarat in a fast-changing scenario. GSPC has drawn up a Rs 8,000-cr plan to cover 20 lakh customers across all districts of Gujarat through a 1,00,000 km long network of pipelines.