In the 1970s, major strike of oil and gas was made at the Bombay High - Bassein fields off the western coast of Maharashtra and Gujarat. For a number of years at the start the focus was on oil. Infrastructure was quickly created under stalwarts like N B Prasad, P Venugopalan and Col S P Wahi, to step up production and get the crude oil transferred to the mainland for processing in quick time.

I had a glimpse of the excitement and the flourish when I had the opportunity to visit the oil platforms and processing platforms located over 100 km west of Mumbai in deep sea. The reach was by helicopters operated by a Canadian firm; hopping from the ship anchored for residential purpose, to the production platforms and the processing structures and witnessing the spirited workforce was a great experience. Youngmen worked at a stretch for two weeks living in the ship and returned home on holiday for the subsequent two weeks.

The tide in the affairs of Essar…

Great fortunes were made by new entrants: Essar provided the most interesting of the great success stories: it started as a supplier of victuals and other essential stores; Essar accumulated expertise in a vast range of oil-related activities like laying submarine pipelines, engineering and construction of oil platforms… The spectacular growth recorded by Essar in quick time in steel, engineering, construction, power, shipping, oil… thus had its origin at the Bombay High. ONGC evolved in quick time as among the leading explorers and producers of oil.

For quite a few years, gas associated with oil production was just flared. The technology for capturing and transmitting it to the shore was not well-developed at that point of time. In the 1980s attention was paid to this issue. Gas terminals were set up at Uran in Maharashtra and Hazira in Gujarat. Understandably these two states have been the major beneficiaries of the availability of cheap and elegant natural gas. Progressively and in quick time and in keeping with the global evolution of technology for using the gas, India also expanded gas use as mere fuel to a precious source for generation of power, production of fertilizers and a vast range of petrochemicals, for transportation, piped gas for domestic use…

Understandably, the proximity of Gujarat and Maharashtra to the source of production (especially for Gujarat also producing gas onshore), this was a great boon. These two states developed in quick time large capacity fertilizer,petrochemical and power plants based on gas and also used gas effectively for a variety of other industries like ceramics.Today Gujarat accounts for the largest share of natural gas consumption. I reckon the prosperity of Gujarat flowing substantially from this single factor. Significantly, the very large fertilizer plants of KRIBHCO, IFFCO, GNFC and GSFC located in Gujarat are all based on natural gas. The large industrial complex of Hazira where giant plants of Reliance, Essar, L&T… are located, is also a sizable user of natural gas.

The HBJ pipeline...

In the 1980s the then prime minister Indira Gandhi and later Rajiv Gandhi conceived of a large project to take this gas east: six large fertilizer plants with initial capacity of 2250 tonnes per day of urea, three power plants and LPG fractionation plants were set up along the Hazira-Bijaipur-Jagdishpur (HBJ) pipeline. This was later extended to Delhi via Haryana. The capacity of these plants has been expanded substantially. The pipeline also feeds dozens of power and other industrial plants and also supplies compressed natural gas (CNG) for public transport in the national capital region as also supplies piped gas for domestic use. Investments on industries based on gas along this route is over Rs. 50,000 crore and the value of output exceeds Rs. 500,000 crore.

IE campaign started in the 1980s

In the 1980s I raised the issue of a fair share of natural gas for the southern states in discussions at the annual Economic Editors' Conferences. I submitted this request to the then Union Ministers Murasoli Maran (Urban Development) and M S Gurupada-swamy (Oil & Natural Gas). In August 1991 IE carried a cover story, Gas for south – pipedream of pipelines suggesting construction of a gas grid for the southern states. Since the entire gas produced was already committed to users in the existing consuming states, this issue did not receive much attention.

The discovery of gas in the Krishna Godavari Basin in 2002 revived hopes on the southern region catching up. When Reliance Industries got a measure of the huge size of the discovery, known for dreaming big and for quick implementation, the company invested substantial amounts on setting up production facilities. Commercial production began in April 2009. It could even have been earlier, but for the dispute between the Ambani brothers over sharing the huge profits.

Apart from Reliance, ONGC, Cairn India, Gujarat State Petroleum Corporation, Brit Gas… have set up facilities for production of gas from the KG Basin. AP Gas Infrastructure Corporation is the new entrant setting up facilities in cooperation with ONGC and Oil India.

Elegant, economical and eco-friendly…

There are three major players in the gas business:

The first is the producer, the second is the player to take the gas from production wells to consuming centres and the third, consuming industries and users.

IE took the initiative to bring together all the three segments involved. Over the last couple of months, IE wrote to the chief ministers of the four southern states, to the Union Minister of P&NG and the Secretary, Ministry of P&NG. I also personally met with chief minister V S Achuthanandan of Kerala and deputy chief minister M K Stalin and minister of Rural Industries Pongalur Palanisami of Tamil Nadu. Happily the southern chief ministers have taken up the issue with the Centre. In recent weeks the chief ministers had written to the prime minister on this subject requesting for a fair allocation of natural gas from the KG Basin to their respective state.

- KG GAS - a fair share for south (Click to continue)

- The Way forward (Click to continue)