The evolution of natural gas pipelines in India has seen significant changes. Initially dominated by GAIL (India) Limited and Gujarat State Petronet Limited (GSPL), the sector expanded with private players such as Reliance Gas Transportation Infrastructure Limited developing 7,200 km of pipelines before 2007. With the formation of the Petroleum and Natural Gas Regulatory Board in 2006, new regulations and multiple tariff structures were introduced, highlighting regional imbalances in the pipeline network. Since 2020, efforts have been focused on the “One Nation One Gas Grid” initiative, the centre’s flagship gas infrastructure project, which aims to connect 22 trunk and regional pipelines, promising a unified and efficient national network.
Existing network
The natural gas pipeline network in India is poised for significant expansion, with a total announced length of 33,000 km. Of this, around 23,300 km is currently operational and about 10,000 km is under construction. The existing infrastructure is heavily concentrated in the western and northern regions, where major terminals such as Dahej (Petronet LNG), Mundra gas subcooled process, Hazira (Shell India) and Dabhol (GAIL) serve as key nodes.
The eastern and southern regions of India are still awaiting integration into the national gas grid. This expansion is critical for achieving a balanced and comprehensive pipeline network, to address the current regional disparities and support the vision of a unified gas grid.
Underutilised infrastructure
Of the 23,300 km of operational pipelines, about 8 per cent are managed by private entities. This indicates a predominant control of public sector companies over the gas pipeline infrastructure. According to the Petroleum Planning and Analysis Cell, as of December 2023, the capacity utilisation of various natural gas pipelines in India showed significant variation.
TheHazira-Vijaipur-Jagdishpur/Dahej-Vijaipur gas pipeline (HVJ/DVPL), Dahej-Uran pipeline/Dadri-Panipat natural gas pipeline (DUPL/DPPL), Dadri-Bawana-Nangal natural gas pipeline, Chainsa-Jhajjar-Hissar natural gas pipeline, Dabhol-Bangalore natural gas pipeline, and Mumbai regional GSPL networks are operating at 48 per cent capacity utilisation. In contrast, the high pressure (HP) network is performing at 95 per cent utilisation. The low pressure (LP) network, however, is at 47 per cent, indicating that it is underutilised, similar to the pipeline operated by Pipeline Infrastructure Limited (PIL), which is operating at 36 per cent capacity. The Indian Oil Corporation Limited network showed a slightly better utilisation rate of 56 per cent, while the ONGC Uran Trombay pipeline was utilised at 52 per cent.
The RGPL SHPPL pipeline is significantly underutilised, at only 17 per cent. These figures highlight the disparities in pipeline usage and underscore the need for better optimisation and utilisation strategies to enhance the efficiency and economic viability of the natural gas infrastructure in India.
The country’s longest cross-region gas pipeline, currently operated by PIL, spans around 1,480 km, including spur lines. This pipeline is strategically placed to connect major gas sources on the eastern coast of India to key demand centres in the west, playing a crucial role in the country’s National Gas Grid. The connections include the GAIL-KG basin network, the GITL-Mallavaram-Bhopal-Bhilwara-Vijaipur-pipeline, GAIL DUPL, the GSPL LP network in Gujarat, the GSPL HP network in Gujarat and the GAIL-DVPL.
Up until November 2023, the bi-directional flow pipeline had achieved an increase in capacity utilisation from 36 per cent to 40 per cent, driven by contributions from the D6 field, regassified liquefied natural gas from the west coast and administered price mechanism supplies.
Key challenges
Operating and developing natural gas pipelines in India comes with various challenges. A major issue is maintaining the integrity of the pipelines. Encroachments along the right-of-users (RoU) areas can compromise the safety and functionality of the pipelines. Given their extensive lengths, ensuring proper maintenance is difficult. Obtaining RoU approvals and permissions from local authorities often leads to delays, causing time and cost overruns and slowing the expansion of the gas network. Another challenge is pipeline underutilisation, leading to tariff under-recoveries. This discourages investment in pipeline infrastructure, as transporters face volume risks and cannot ensure returns on their investments, in turn slowing the expansion and modernisation of India’s gas pipeline network.
Safety concerns are particularly prominent in remote areas where pipelines and compressor stations are located. Ensuring both process and personal safety in these isolated locations presents significant challenges. Additionally, data management poses a substantial problem. The lack of robust systems for managing and analysing pipeline operation data hampers effective monitoring of pipeline conditions. This is compounded by a shortage of skilled manpower, crucial for maintaining and operating the pipelines effectively.
Securing funding and investments is another significant challenge. New gas pipeline projects often require viability gap funding (VGF) to be financially viable. Transporters face volume risks due to uncertainty in gas demand, affecting the profitability and attractiveness of investments.
The southern region of India remains disconnected from the National Gas Grid, limiting natural gas availability. Technical alignment issues, such as software compatibility, gas specifications and standardising codes, pose challenges for a unified grid. Development has been focused on regions with significant gas production and import terminals, leaving other areas underserved. Many pipeline projects face delays due to land acquisition, clearance issues and uncertainty about steady gas demand from anchor customers.
Effective solutions
In order to overcome the challenges facing this industry, implementing best practices in the operations and maintenance of pipelines is essential. This will ensure safety, efficiency and longevity of the pipeline infrastructure. A key solution is to establish comprehensive governance and operational guidelines. Standard operating procedures and standard maintenance procedures should be developed according to best practices in the hydrocarbon industry.
Adopting best-in-class asset management strategies is another solution. By deploying advanced asset management philosophies, operators can extend the life of their assets and promote sustainability. This would involve regular monitoring, maintenance and upgradation of equipment to prevent failures and enhance performance over time. Data analytics can also support pipeline integrity management by identifying potential issues beforehand.
Competency development is vital for the efficient operation of pipelines. Providing continuous training and development opportunities ensures that the workforce is well equipped to manage the complexities of pipeline operations.
Leveraging technology to provide innovative solutions can greatly enhance pipeline management. Robotic process automation can ensure that allocated quantities of gas are delivered on time, thereby improving efficiency. Pipeline intrusion detection systems can detect third-party interference and enhance security. An automated contract extension module can simplify the capacity booking process, making it more user-friendly. Additionally, data analytics can be used for a pipeline integrity management system to monitor and maintain the health of the pipeline. The use of virtual accounts can simplify the receivables process, ensuring timely and accurate financial transactions.
Future outlook
The investment outlook for natural gas infrastructure in India is highly promising. To meet the country’s growing energy demands, it is estimated that around $67 billion will be invested over the next five to seven years in the natural gas supply chain. The sector is also open to 100 per cent foreign direct investment, encouraging both domestic and international investments.
Addressing the non-equitable distribution of cross-country pipeline networks and LNG terminals is also important. Government policies, including VGF for cross-country pipelines, single-window clearance and accelerated asset monetisation, are needed to expedite the creation of natural gas infrastructure. Streamlining clearances, standardising tax rates and implementing the goods and services tax (GST) for natural gas are necessary steps. Promoting the participation of private operators and international investors in India’s gas infrastructure development is vital. By encouraging such investments and fostering a conducive policy environment, the country can effectively meet its future energy needs and achieve its full potential in the natural gas sector.
Based on a presentation by Manoj Pandey, Vice President – Business Operations, Development & Regulatory Affairs, Pipeline Infrastructure Limited, at a recent India Infrastructure conference