GAIL inks supply pact with SAIL

GAIL India and Steel Authority of India Ltd have entered into a heads of agreement for supply of 3.56 million metric standard cubic metre per day natural gas/R-LNG to various plants of SAIL in 2006-07.

With this, SAIL expects to further bring down the consumption of coking coal to the extent of around 1 million tonne per annum.

The pact envisages 0.913 million units supply to Bhilai Steel Plant daily, .156 million units per day to Durgapur, 0.427 million units per day to Rourkela, and 1.067 million units per day to Bokaro.

SAIL had approached GAIL to explore the possibility of obtaining the natural gas for bulk usage in its four integrated steel plants.

With growing demand for coking coal world over, there has been a shortage of this vital input used for steel making.

SAIL had faced major difficulty in availability of coking coal during the first few months of current financial year. This had prompted the steel major to opt for use of alternate fuels like coal dust injection and use of coal-tar.

Besides, the use of natural gas is also expected to strengthen the company's effort to provide a cleaner environment while reducing its dependence on coking coal to some extent.

The use of natural gas will also enhance the productivity of the furnaces and contribute to reduction in cost of operation.

The gas to the plants will be supplied through the proposed Jagdishpur-Haldia pipeline of GAIL. The pipeline is being laid as a part of the Gas Grid planned by GAIL to connect the sources of gas to demand centres throughout the country.

Jagdishpur-Haldia pipeline is a significant limb of the Arterial Energy Flow Programme of GAIL for linking sources of gas to demand centers across the country.

The 30-inch diameter 840 km long Jagdishpur - Haldia pipeline is estimated to cost approximately Rs 2,700 crore (Rs 27 billion) and will have a capacity of 12 million units per day, which can be further enhanced to 15 and 21 million units per day.

The Jagdishpur-Haldia pipeline will pass through the states of Uttar Pradesh, Bihar, Jharkhand and West Bengal.