Government approves over Rs 5000 crore fund for North East natural gas grid project

Government approves over Rs 5000 crore fund for North East natural gas grid project

Question: Consider the following statement:
(1)The Natural Gas Pipeline Grid will connect Guwahati ,Agartala, Aizawl, Kohima, Imphal, Dimapur and Itanagar.
(2)The Government has approved ‘Viability Gap Funding’ worth Rs 5559 crores to set up a natural gas pipeline grid in the North East.
Choose the correct one:
(a) Only(1)
(b) Only(2)
(c) Both(1) and (2)
(d) None of the above
Answer :(c)
Related facts:

  • The Government has approved ‘Viability Gap Funding’ worth Rs 5559 crores to set up a natural gas pipeline grid in the North East.
  • The Cabinet Committee on Economic Affairs gave its approval to the project on January 8, 2020.
  • This is the second such funding approved by the Union Government for a gas pipeline project.
  • Under the project, a capital grant worth Rs 5559 crores will be provided to Indradhanush Gas Grid Limited to build a natural gas pipeline grid covering eight north eastern states.
  • The Indradhanush Gas Grid Limited (IGGL) has been set up as a joint venture company of five CPSEs – ONGC, IOCL, OIL, GAIL and NRL to develop and operate natural gas pipeline grid in the north east. It was set up in 2018.

Viability Gap Funding:

  • The sanctioned funding will cover 60 percent of the total cost of the natural gas pipeline project.
  • The total expenditure of the grid project is expected to be around Rs 9256 crores.
  • The funding will help natural gas supplies reach different kinds of consumers such as Industrial, CNG (Transport) and PNG (Domestic) and substitute the liquid fuels.
  • The Union Ministry of Petroleum and Natural Gas will identify major milestones for the project and link the same for the release of capital grant.

North East Natural Gas Pipeline Grid:

  • The Natural Gas Pipeline Grid will be developed in the eight states of the north east including Sikkim and the seven sisters- Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
  • The total length of the pipeline will be 1656 km.It will connect Guwahati in Assam to other major cities in the region such as Agartala, Aizawl, Kohima, Imphal, Dimapur and Itanagar.

Advantages:

  • The availability of natural gas across the north east will help boost industrial growth in the region.
  • It will also be environment-friendly and would offer a better quality of life to people due to the use of cleaner and green fuel and reduction in the usage of wood and kerosene.
  • It will also boost production and exploration activities in the region and help connect regional gas sources with pipeline network for early monetisation of natural resources in the region.
  • It will also open the possibility of installing bottling plants for LPG in the region to reduce transportation costs. The uninterrupted supply of LPG will bring energy security to the people living in the region.
  • The Natural Gas Pipeline Grid project is a significant step towards achieving the central government’s Hydrocarbon Vision 2030 for the North-East.
  • The Government aims to bring in a gas-based economy and increase the share of natural gas in the country’s energy mix.

Links:
https://www.thehindu.com/news/national/govt-to-provide-5559-crore-funding-to-northeast-gas-grid/article30513102.ece
https://economictimes.indiatimes.com/industry/energy/oil-gas/govt-to-provide-rs-5559-cr-viability-gap-funding-to-set-up-gas-grid-in-northeast/articleshow/73155228.cms
https://www.thehindubusinessline.com/economy/policy/government-to-provide-rs-5559-crore-funding-to-northeast-gas-grid/article30513448.ece
https://www.business-standard.com/article/economy-policy/govt-to-provide-rs-5-559-cr-viability-gap-funding-to-set-up-gas-grid-in-ne-120010800899_1.html

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