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Gail lines up Rs 7,600 cr to set up India’s longest gas pipeline

28 Jul 2009 Evaluate

Gail India, the country’s largest gas transportation company, will invest Rs 7,600 crore in building India’s longest gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal. This is so far the single-largest investment in any pipeline by Gail. Besides the 2,050-km pipeline, the company will invest an additional Rs 400 crore to lay two spur pipelines. The board had approved the pipelines at its meeting on Friday, which are estimated to cost Rs 8,000 crore.

The two spur lines will link Barauni and Chhapra in Bihar with Gail’s pipeline network. It currently operates 7,100 kms of gas pipelines and plans to double its network by March 2012 with an investment of around Rs 28,000 crore. The funding of the project will be done through internal accruals and debt. Gail’s current debt, equity ratio is 0.12:1. Hence, the company is in a comfortable position to borrow substantially.

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