For sometime now there has been a great deal of buzz about India’s move to a gas-based economy. And on Monday, this perhaps takes the first step with Prime Minister laying the foundation stone for Rs 1,000 crore city gas distribution network for Varanasi. The 800 inch km pipeline network will be used to supply clean fuel to the end consumers in the city. The hashtag #UrjaGanga (River of Energy) aptly conveys the benefits that people of Varanasi will enjoy once the infrastructure is put in place.
Varanasi, thus becomes the first city in the government’s growth roadmap of Eastern India. The government had recently approved 2540 km of gas pipeline Jagdishpur – Haldia, Bokaro – Dhamra pipelines, which will ensure smooth supply of gas in five states of Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha. It also means cities including Varanasi, Patna, Ranchi, Jamshedpur, Kolkata, Bhubaneswar, Cuttack will have city gas distribution system and people will have an option to switch to cleaner fuel.
The 800 inch km pipeline and supporting infrastructure will benefit 36.8 lakh population residing in the city. In near future LNG run steamers will be encouraged to transport goods through the Ganga. This is expected to create direct and indirect employment for over 1000 people. Once the infrastructure is laid for gas supply, over 200,000 households will get piped natural gas. Piped natural gas will also benefit commercial and industrial establishments, as it is much safe and economic as compared to other fuels. With 20 CNG stations installed, over 20,000 vehicles in Varanasi will have access to clean fuel.
Natural Gas is considered to be the ACE fuel - affordable, clean, and efficient. The event is significant, as the investment in clean fuel will accelerate the economy of the region without putting burden on the environment. Investment in natural gas is practically an investment towards clean environment with increased pace of development. Downstream of the pipeline, at least 25 industrial clusters will be developed in 5 states of UP, Bihar, Jharkhand, West Bengal and Odisha, which besides other benefits would also mean job creation for our youth. The investments in creating Natural Gas infrastructure Varanasi is part of the larger plan that the government has for eastern India.
The integrated planning for the region gives confidence for timely completion of Varanasi project. Total investments of Rs 51,000 crore have been planned for Eastern India. Rs 13,000 crore for Jagdishpur-Haldia & Bokaro-Dhama pipeline, Rs 6000 crore for Dhamra LNG project, Rs 6000 crore for city gas distribution network and Rs 26,000 crore for fertiliser project. All these developments are linked to each other and have to be completed within the deadline to extend the full benefit.
The difference that is encouraging in this particular case is the fact that the government for the first time has committed investments from its coffers for laying of gas pipeline infrastructure. It is unprecedented and also provides a strong cushion to the industry in terms of assuring them of government long-term commitment for the cause.
The government last month had committed to provide a viability gap funding of 40 percent to GAIL (India) Ltd to construct the Jagdishpur-Haldia and Bokaro-Dhamra gas pipeline project. The Cabinet Committee on Economic Affairs approved grant of around Rs 5,176 crore for the project which has an estimated cost of Rs.12,940 crore.
Apart from the infrastructural benefits, use of gas is also cost affective. Switching to gas from oil makes huge sense as only 1 percent reduction of liquid fuel by gas would mean a reduction of at least $1 billion (approx Rs 7000 crore) per annum. The saving is calculated considering India’s current oil import bill based on present consumption levels, while replacing just 1 percent coal currently burned for power would cut carbon emissions at par with increasing renewable power generation by 11 percent.