GAIL India's Rs 30,000-Crore Capex Blueprint For Expansion

GAIL Ltd. has announced an investment strategy of Rs 30,000 crore to facilitate future expansion.

The company's total capital expenditure for FY23 stood at Rs 10,000 crore, and its FY24 estimated capex stands at Rs 12,000 crore.

"We are targeting to incur a capex of Rs 30,000 crore in the next three years, mainly on pipelines, ongoing petrochemical projects, CGD projects, operational capex, equity contributions in group companies, etc.," said Sandeep Kumar Gupta, chairman and managing director at Gail, at the company's 39th Annual General Meeting held on Aug. 23.

The company currently has 15,600 kilometres of pipelines under operation and 4,200 kilometres of pipelines under construction. It will complete 20,000 kilometres of the National Gas Grid in the next calendar year, said Gupta.

The company has commissioned the Dhamra-Angul Mainline with spur lines to Jamshedpur, Ranchi, Cuttack, and Bhubaneshwar. This enables the company’s regasified liquefied natural gas supply from the Dhamra LNG terminal and adds one major gas source to its pipeline network on the east coast.

The company has also won the licence to build, operate, or expand a 160-kilometre natural gas pipeline—the Gurdaspur-Jammu Natural Gas Pipeline—at the recent bidding of the Petroleum and Natural Gas Regulatory Board. With this, GAIL will enable access to natural gas in the northern and northeastern parts of the country.

GAIL’s acquisition of the 1.25 MMTPA PTA plant of erstwhile JBF Petrochemical Ltd. offers the company an opportunity to add a new chemical product—purified terephthalic acid—to GAIL’s existing product portfolio, said Gupta.

The company is also implementing the country’s first propane dehydrogenation PP plant, with a capacity of 5,00,000 tonne per annum, and a 60 KTA polypropylene plant.

It is also setting up its first specialty chemical plant for isopropyl alcohol, with a capacity of 60 KTA. These additions will bring the company’s portfolio of petrochemicals to 3 million metric tonnes per year, according to Gupta.

GAIL is currently exploring long-term LNG sourcing opportunities with major global players in the space, said Gupta.

The firm has an expression of interest to explore the opportunity of equity acquisition in LNG liquefaction terminals, along with a 1 MMTPA LNG tie-up from the U.S., he said.

As an integral part of the Sustainable Alternative Towards Affordable Transportation initiative, GAIL is setting up its first municipal solid waste-based compressed biogas plant with a 5-tonne per day production capacity at Ranchi.

In line with the government's National Hydrogen Energy Mission, it is also setting up a 10 MW green hydrogen production unit with a capacity of 4.3 tonne per day in Madhya Pradesh. Both plants are expected to be commissioned by December, Gupta said.

The company has also received the Karnataka government’s approval to set up a municipal solid waste-based 10-tonne per day compressed biogas plant in Bengaluru.

Gupta said that GAIL is keen on developing a much larger number of CBG plants across India.