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IOC seeks nod to join deep sea gas pipeline project of SAGE

Tuesday, June 12, 2012

Peeved by the authorisation given to GAIL (India) for pursuing the deep sea natural gas pipeline project from the Middle East to India, state-run Indian Oil Corporation (IOC) has written to the Petroleum and Natural Gas Ministry seeking permission to join the crucial pipeline project with South Asia Gas Enterprise (SAGE).

Arguing that it was increasing its gas presence by significant investments in infrastructure such as LNG import terminal, gas pipelines and city gas distribution projects, IOC said all such projects would require gas as feedstock. “IOC needs to have substantial presence in the gas market to make up for the loss in liquid fuel business to provide total fuel solutions to the customers and to maintain its leadership in the oil and gas market,” it argued.

SAGE Project

IOC had signed a `principles of co-operation (POC)’ with SAGE, which is pursuing deep sea natural gas pipeline project from Oman to India, in a consortium with other international companies. SAGE is a project development vehicle set up for the proposed deep sea natural gas pipeline project from the Middle East to India. It is a consortium formed by Siddho Mai Group of India, Intec Engineering of the U.K., Heerema Marine Contractors Nederland B.V. of Holland and Corus Tubes of the U.K.

However, it has come to the knowledge of IOC that during the first session of the India-Oman joint working group meeting held last October in Muscat, GAIL had been authorised to pursue the project with SAGE and that SAGE and GAIL had entered into POC to pursue opportunity to source gas from Oman and other Middle East countries.

IOC has argued that its active participation in the SAGE project would allow it to retain its relationship with liquid hydrocarbon customers and facilitate their switchover to natural gas.

Transnational pipelines

SAGE pipeline is expected to transport 30 million metric cubic metres of gas per day, the same volume as what Iran has earmarked for India in the proposed Iran-Pakistan-India pipeline. SAGE would charge a transport fee of around $1 per million metric British thermal unit, officials in IOC said. “The Petroleum Ministry has always encouraged IOC to participate in transnational gas pipeline projects such as Bangladesh-India gas pipeline and Iran-Pakistan-India (IPI) pipeline, a project that has failed to take off. IOC has been a prominent part of all government initiatives in gas pipeline projects. In view of the above, the Petroleum Ministry is urged to authorise participation of IOC in deep sea natural gas pipeline project from the Middle East to India,” it added.



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