Assocham for infrastructure status to gas pipelines

New Delhi, Oct 11: Industry body Assocham today sought conferment of infrastructure status on gas pipelines to encourage easy flow of petroleum products across the country.

In a background paper on 'Supply Network for Natural Gas', the body argued that as laying of pipelines carry basic energy input for a large amount of economic activities, granting of infrastructure status to them will help industry to lay large network of gas pipelines.

Assocham President Anil K Agarwal said that a pipeline built on common career principle with 33 per cent excess capacity would be akin to a road or bridge which are accepted as public goods.

Citing rationale for infrastructure status to pipelines, Mr Agarwal said these projects are highly capital intensive requiring high amount of debt and equity. High input costs would translate in high costs of outputs like crude or natural gas and transportation.

This would indirectly affect the cost of output of main consumers of natural gas such as power and fertiliser industries. Hence, to maintain cost efficiently and affordability, pipelines should be extended benefits that are available to other infrastructure projects, the chamber said.

Gas pipelines are a critical infrastructure project which benefit large section of the society and therefore should be provided with incentives to facilitate development of a comprehensive network, the paper said.

Another argument, referred in the paper for seeking infrastructure status for pipelines, is that the availability of natural gas-- a diversified application as fuel and feed stop for power, fertiliser, petro-chemical, small scale industries, commercial and transportation purposes -- at various locations will help in replacing costlier and more polluting fuels like HSD, LSFO, LSHS, Naphtha and coal.

These would be instrumental in saving health cost due to air pollution in urban areas of the country.

''The chamber is also of the view that transportation of natural gas through pipeline is economically cheaper and safer. According to the Ministry of Petroleum and Natural Gas, the cost of pipeline transportation is 30-50 per cent of railway freight and 20-25 per cent of road freight.'' It has also argued that gas pipeline will facilitate investment of huge volumes in large, medium and small industries, resulting in more employment opportunities, capital investment and growth in industrial output and create economies of scale, which will be possible provided the government considers infrastructure status for pipeline at par with other areas of infrastructure such as roads and railways and the like.

The paper which has been submitted to the Ministries of Petroleum and Natural Gas, Finance and the Commerce and Industry, also points out that as natural gas has emerged as the most preferred fuel due to its inherent environmentally benign nature, greater efficiency and cost effectiveness, the demand of natural gas has sharply increased in the last two decades at the global level.

UNI