Why in news?
- Cabinet Committee on Economic Affairs (CCEA) on 8th January approved a ₹5,559 crore viability gap funding for the proposed Northeast Gas Grid. (Gas Pipeline)
- The 1,656-km North-East Natural Gas Pipeline Grid will connect Guwahati in Assam to major cities in the region such as Itanagar, Dimapur, Kohima, Imphal, Aizwal, Agartala, Shillong, Silchar, Gangtok, and Numaligarh.
- The pipeline will enable the supply of piped cooking gas to households and CNG to automobiles, besides fuel to industry.
- The North-East pipeline grid is to be implemented by Indradhanush Gas Grid, a joint venture of state-owned GAIL India, Indian Oil Corp (IOC), Oil and Natural Gas Corp (ONGC), Oil India Ltd (OIL) and Numaligarh Refinery Ltd (NRL).
- The consortium had pitched for a 60 per cent funding support from the government and would raise the rest via equity and debt. Without government support, the pipeline will not be viable.
- The pipeline will not be viable due to the absence of anchor customers.
- Availability of natural gas across the region is expected to boost industrial growth without impacting the environment and would offer better quality of life to the people in general due to use of cleaner and green fuel.
Gas pipeline projects in the past
- This is the second time that a gas pipeline project in the country will be funded by the government.
- In 2016, the government provided a capital grant of ₹5,176 crore, or 40% of the project cost of the 2,655-km Jagdishpur-Haldia and Bokaro-Dhamra (JHBDPL) gas pipeline project, which GAIL is currently executing.