Top Gujarat PSU faces fresh environmental hurdle in commercial production of gas "produced" off Andhra coast

By Rajiv Shah 
The Gujarat government’s powerful state public sector undertaking (PSU), Gujarat State Public Corporation (GSPC), has faced a major environmental hurdle, putting its Rs 2,030 crore project to go in for commercial production of the gas it claims to have found in the KG Basin, off Andhra coast, in jeopardy. Asking the GSPC to “defer” the project till certain conditions are fulfilled, sources in Gujarat’s energy and petrochemicals department said, the expert appraisal committee (EAC) of the Union ministry of environment and forests has refused to give blanket coastal regulatory zone (CRZ) clearance for laying down underground gas pipeline, optical fibre cable (OFC), an effluent disposal pipeline – all of which is proposed to pass through CRZ area of Yanam-Puducherry, along the Andhra Pradesh coast – as also the proposal to set up an onshore gas terminal off Mallavaram and a process-cum-living quarter platform at offshore in KG Basin, Andhra Pradesh.

The GSPC had argued that both these proposals were "component of a single project”, hence the EAC should consider all of it as a single project. The GSPC said, after “discovery” of gas in the Kakinada-Godavari (KG) basin’s block 8, GSPC had decided to develop the field as Deendayal Development Field. Environmental clearance from the Ministry of Environment and Forest (MoEF) was obtained for the field development, which consisted of setting up of well head platform (WHP) at offshore ( KG 8 location), drilling of 15 development wells from WHP, laying of multiphase produced fluid pipeline from offshore (WHP) to land fall point (LFP), and from LFP to onshore gas terminal (OGT) at Mallavaram, laying of pipeline for disposal of treated effluent from OGT at identified marine outfall location, and processing facilities for 240 million metric standard cubic feet per day (MMSCFT), and a condensate.
The EAC note, which refused the CRZ clearance, says, "Subsequently, with receipt of consent for establishment (CFE) from the State Pollution Control Board, physical construction work for the above field development commenced. In the mean time, with availability of additional well test data, capacities of some of the already envisaged facilities were required to be enhanced, and some new facilities were required to be added in the development scheme so that it continued to remain effective and optimum.”
It is against this backdrop that the GSPC submitted an application for obtaining CRZ clearance for process-cum-living quarter platform connected to WHP (with gas dehydration, produced water treatment, living quarter facility) located at offshore, apart from other facilities. The GSPC simultaneously asked for enhancement of processing capacity of onshore gas terminal (natural gas – 240 MMSCFD to 300 MMSCFD, of capacity of the captive power plant (from four to 24 MW), and “evacuation of process sale gas from OGT through sale gas pipeline to East West Pipeline (EWPL) of Reliance Gas Transportation Infrastructure Ltd (RGTIL)”, to quote from the EAC note.
The GSPC also wanted raw water pipeline (74 Km long) to draw raw water from the upstream of Dowlaiswaram barrage. “This proposal was considered by Andhra Pradesh state Coastal Zone Management Authority (APCZMA) on November 7, 2012 and recommended the project to MoEF”, the note said.
During the discussion on these issues, the note clarified, the GSPC was asked to submit: (1) details of the critical environmental issues identified during laying of pipeline, (2) environment clearance for enhancement of captive power plant, under consideration of environmental appraisal committee (EAC) of the thermal committee, which has also sought examining the requirement of wildlife clearance in view of Coringa Sanctuary located in 2.5 km distance, and (3) the plan of the pipeline to pass through the mangroves. “In view of the foregoing observations, the committee recommended to defer the proposal. The proposal shall be reconsidered after the above observations are addressed and submitted”, the top note said.
The EAC decision to ask the GSPC to defer its Rs 2030 crore worth of facilities comes after the Andhra Pradesh government took strong objection to the GSPC for failing to take necessary forest and wildlife clearances for its proposed facilities. It reportedly asked GSPC executives to “stop work” of laying down a crucial submarine pipeline to take gas from KG Basin to its onshore gas terminal (OGT) via an area which is 10 km of the Corianga sanctuary without necessary clearances. It asks them to explain “why action shouldn’t be taken” for violating forest and wildlife laws.
It is said, the GSPC “only took environmental clearance” and thought it was “enough.” After nearly two years, its top bosses found that environmental clearance was not enough, and that forest and wildlife clearance, under their respective Central laws, would also need to be taken, without which KG Basin gas cannot reach OGT. “Hectic preparations began to prepare papers”, a senior official said, adding, “The delay in failing to take necessary clearances will mean commercial production of KG Basin gas will have to be postponed by at least two years. ” The notice to “stop work” was delivered after GSPC failed to respond to two earlier warnings.
The work for the Rs 2,030 crore OGT was under progress at Mallavaram, and nearly 30 per cent of it had been complete. Under instructions of chief minister Narendra Modi, OGT it is said, was put on fast track, with the expectation that ahead of the Lok Sabha polls in 2014, GSPC would go into full-scale commercial operation. This would help neutralize some of the criticism being leveled against GSPC for creating hype around the KG operations, where instead of the prematurely announced 20 trillion cubic feet (tcf) of gas only 2 tcf was found. Nobody knows how of much of the 2 tcf is actually recoverable. Meanwhile, GSPC is search of a foreign partner who can help make maximum utilization of the KG gas.