Calcutta, Feb. 14: Bengal's grid-based gas distribution project has hit a hurdle because of delay in getting the regulator's approval and uncertainty over gas supply from the KG basin.
The project, with an estimated investment of over Rs 2,000 crore, is expected to cater to Calcutta, the North and South 24 Parganas, Howrah, Hooghly, Kalyani and Nadia.
A special purpose vehicle (SPV) was formed in November 2011 and a memorandum of understanding was signed by the three players ' GAIL, HPCL and Greater Calcutta Gas Supply Corporation. While GAIL and HPCL have 37 per cent stake each in the SPV, Greater Calcutta Gas Supply owns the remaining 26 per cent.
Even after a year and two months, the project is yet be cleared by the Petroleum and Natural Gas Regulatory Board. Falling output from KG basin has added to the uncertainty.
HPCL chairman and managing director S. Roychowdhury today said, "We are still waiting for the clearance. There are problems of gas supply as well. We are not sure when we would be able to start the project," Roychowdhury said on the sidelines of a conference here today.
He, however, said the project would be feasible if the gas supply could be ensured. "We are not looking to exit the SPV," he said when asked if the company was looking to walk out of the project. HPCL was supposed to lay the pipeline for the new grid.
Greater Calcutta Gas Supply operates in some areas of Calcutta, Howrah and Hooghly by souring gas from the Dankuni coal block of Coal India.