By 2020, India will need 115 to 135 billion cu m of natural gas supply, much of which is planned as an alternative to both power and energy needs. As the inevitable National Gas Grid for domestic and industrial projects become the nation's new environment-saviours, it's also where the biggest opportunities are pipelines lie, says Daya Kingston.
This year, a poor show by the Gas Authority of India's (GAIL) gas transmission segment, its biggest profit contributor, took a toll on the company's performance. Despite transmission volumes (120.43 mmscmd) remaining almost the same as in the December quarter, the segment's profits dipped 20 per cent on a sequential basis in the next quarter. Yet, in perspective, the Indian pipeline industry is all set to roar, buzzing with activity as the nation plans to develop the National Gas Grid and other international pipeline networks for oil and gas make headway. Transportation costs are one of the major contributors to the price rise of oil and gas and reducing these costs bring in substantial savings. The current mode of transporting these includes pipelines (32 per cent), road tankers (32 per cent), rail tankers (26 per cent) and water carriers (10 per cent). However, as highly cost effective, energy efficient, safe, environment friendly with a negligible loss during transit and low maintenance and energy costs, pipelines are easily the most preferred mode of transportation.
Calling 3 mt of pipes: The National Gas Grid is a giant project being impÂlemented by GAIL, India's flagship natural gas company that integrates all aspects of the value chain includng exploration & production, processing, transmission, distÂribution and marketing. The Grid will be a 17,000 km pipeline network that will call for 3 million tonnes of LSAW pipes and will be completed in three or four years. (The proposed oil pipeÂline network will consume 0.6 mt of LSAW pipes for a network of 5,000 km.)
The international pipeline oppoÂrtuÂnities that are in the offing include Iran-Pakistan-India (IPI) Gas Pipeline, Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas
Pipeline, Bangladesh – India Onshore Gas Pipeline and imports from Myanmar. The IPI will be 2775 km long with a 1.5 to 3 BCFD throughput pipeline run from Iran's South Pars field to connect with the HBJ pipeline. In 2006, the Indian and Myanmar signed a natural gas supply deal and the gas would be brought to India through a pipeline that runs across Myanmar and terminates at Tripura. TAPI is envisioned at a length of 1,735 km at a project cost of $4 billion, however Pakistan and Afghanistan through which it will have to pass through have an unstable political climate and this could impact the smooth progress of the pipeline.
Contractors such as Punj Lloyd, Jaihind Projects and a burgeoning number of plaÂyers benefit from some major oil and gas pipeline networks are run by the Gas Authority of India (GAIL), Oil and Natural Gas Corporation (ONGC), Indian Oil Corporation (IOC) Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL), Gujarat State Petroleum Corporation (GSPCL), Cairn India's Mangala Development Pipeline (MDP), Reliance Gas Transportation Infrastructure Ltd (RGTIL) and others.
ONGC owns and operates the largest network of subsea pipelines of nearly 4,500 km which comprise both in-field and trunk lines and 8,000 km of onshore pipeline network. The Government run GAIL owns a pipeline network which spans over 7,850 km with a capacity to carry 150 MMSCMD of gas. RGTIL operates an East-West pipeline network of 1,385 km long 48 inch gas pipeline with a capacity to handle 80 MMSCMD of gas. BPCL and HPCL operate over 250 km 750 km pipeÂlines respectively. Cairn India's MDP line enjoys the distinction of being the world's longest continuously heated and insulated 24″ crude oil onshore pipeline, 670 km long. This uses cutting edge techÂnology namely the Skin Effect Heat Management System (SEHMS) to keep crude oil above the Wax Appearance Temperature (WAT).
The Changing Face of Piping Technology
Various kinds of pipes are used in offshore pipeline networks and these conÂsist of Trunk line, in-field pipelines, flow lines, offshore loading/unloading line, marÂine terminal and jetty head pipelines. For onshore pipelines, based on usage this could range from large-diameter, long-disÂtÂance transmission pipeline systems to smaÂll-inch gathering and distribution systems. Piping technology is constantly evolving to accommodate the changing times.
Amit Gupta, CEO, Pipelines & Terminals, Essar Projects (India), says, “Pipes for cross country oil and gas sector are manufactured through the following two routes: Longitudinal Submerged Arc welded pipes (LSAW) or Helical submerged arc welded pipes (HSAW). Predominantly it was the LSAW pipes that were used in the oil and gas sector. However, with techÂnological advancements, the HSAW pipes have now been accepted world wide. Only in the off-shore pipeline it is somewhat mandatory to use LSAW pipes. Today the pipe mills are capable of manufacturing pipes with very low d/t ratios.
“We have the latest technology avaÂilable for maintenance of the pipeline in caliper and intelligent pigging, wherein the health and integrity of the pipeline can be periodically checked. Further, from the infrastructure point of view, we have the concept of common carrier which helps in duplication of infrastruÂcture set up.”
Such technology in pipelines now inclÂudes liquid pipeline inspection tools using Phased Array Ultrasound Technology. (GE's UltraScan Duo is a pioneer.) This is an automated sensor system that can detect comprehensive metal loss, , and corrÂosion detection inspections in a single run. The advantage of using this is a major reduction in operating costs and decrease the risk of pipeline failures.
Demand leads to projects
As India's infrastructure grows, demand for the pipeline network will grow. In fact, the oil and gas demand in India makes it a $110 billion offshore industry, the fifth biggest in the world. This demand is proÂjected to grow from 433 million tonnes of oil equivalent (mtoe) to around 1,856 mtoe by 2032.
The mammoth long distance gas highÂways project will push the country's path to greater progress as it will bring with increased gas availability, boost indigenous production and facilitate higher import of liquefied natural gas (LNG).
In the current scenario, where 67 per cent of India's petroleum oil demand is met by Imports, the government has been working quietly towards minimising this dependency by encouraging large-scale gas exploration and drilling. The New Exploration Licensing Policy (NELP) is an initiative that has opened the doors to Indian and international investment in exploration. The Indian government's 'India Hydrocarbon Vision 2025' has also given an impetus to the rise of onshore and offshore pipeline projects, both national and international.
Currently, the major offshore fields in India are located at Mumbai Offshore Basin – Arabian sea – West coast of India, Gulf of Cambay – North West coast of India, Krishna-Godavari Basin and Cauvery Basin in the East Coast of India – Bay of Bengal. New refineries are coming up and existing capacities expanded, the result is that the demand for pipelines in this area is increasing.
The demand for oil and gas is ticking away at a 6-8 per cent per annum and to capitalise on this potential, appÂroxÂimately $5-6 billion will be invested into pipeline infrastructure.
WE'RE IN A GOLDEN PIPELINE PERIOD
Indian Oil Corporation (IOC) is one of India's biggest operators, with a network of 10,899 km long pipelines for crude oil, petroleum product and gas and a capacity of 75.26 million metric tonne per annum (mmtpa) of oil and 10 million metric standard cubic metre (mcu m) per day of gas. The operational throughput of pipelines was recÂorded at 65.01 mmt during 2009-10.
New pipeline projects of 2,000 km worth approximately Rs 2,000 crore are planned. These include the 700 km Paradip-Haldia-Budge Budge-Kalyani-Durgapur LPG Pipeline, 295 km Sanganer-Bijwasan Naphtha Pipeline, Augmentation of PHBPL and five additional tanks at Paradip, 270 km branch pipeline from Patna to Motihari and Baitalpur, 120 km Cauvery Basin Refinery to Trichy Pipeline and 400 km Ennore-Trichy-Pondicherry LPG Pipeline.
The pipes predominantly being used for oil and gas are High Frequency Inductive (HFI), LSAW, HSAW and seamless. The latest grade of up to 80 is available in India whereas globally there is a grade of even 100 and 120 is being experimented with, With thinner pipes, the tonnage weight comes down and this results in substantial savings when you consider the fact that 50 per cent of the material cost consists of pipe cost.
Composite pipes are usually not used for this purpose though when it comes to the city gas distribution and the last mile connectivity, composites like HDPE may be considered.
Internal and external corrosion of pipeÂlines is one of the major issues faced. Previously, coal tar coatings were used but now there are newer and more durable coaÂtings like epoxy, double fusion epoxy and so on that help in preventing corrosion. Steel is usually quite durable, proof is that a pipeline laid in 1954 is till in good condition.
The pipelines are monitored for various parameters like temperature, density and so on at 10 second intervals with a computerized system and this helps detect any leakage. Intelligent pigging is done and magnetic tools used to assess thickness.
IOC has a 11,000 km pipeline network and there is a lot of expansion on the anvil. Rs 1,000 crore has been put into developing a network of 2,600 km which will be ready by the end of 2013.
One of the biggest challenges we face is acquiring permission to lay pipelines When it passes through forest areas, we have to consult the Gram Panchayats and need the signatures of at least 50 per cent of the voting population to give us the NOC. This is a very time-consuming process. There is also the issue of pilferages that have to be handled.
Pipeline gas makes a lot of sense for industries when gas is provided at a break-even price. The National Gas Grid will make them grow at a faster pace. The pipeline industry is bullish now and it is a golden period for the industry as the demand is shooting up, thanks to the new pipelines.
– KK Jha, Director (Pipelines), Indian Oil Corporation As told to Daya Kingston.