Fresh setback to top state PSU: Gujarat's KG adventure fails to get environmental nod

By Rajiv Shah 
The Gujarat State Petroleum Corporation (GSPC), the premier state public sector undertaking (PSU), has again failed to get environmental and coastal regulatory zone (CRZ) clearance for its proposed onshore gas terminal, a 20 MW captive power plant, 20 underground gas pipelines along with optical fibre cable (OFC), and 10 inches effluent disposal pipeline -- of which it badly needs for commercial production of KG basin gas it struck several years ago. Some of these facilities were to pass through CRZ area of Yanam-Puducherry along the Andhra Pradesh coast. It simultaneously  failed to get clearance for its offshore process-cum-living quarter platform in KG Basin in Andhra sea, where the top PSU had claimed in 2005 to have found 20 trillion cubic metres (tcf) of gas -- a claim which has been questioned.
The issue came up on agenda before the Environmental Appraisal Committee (EAC) of the Ministry of Environment and Forests (MoEF)  a few days back, which noted that as the GSPC has so far not obtained EAC (thermal) clearance for its captive power plant and Andhra Pradesh Coastal Zone Management Authority (APCZMA) clearance for several other facilities, it cannot recommend construction work to commence for these facilities. This is the second time in three months that the GSPC's proposals have been deferred. According to GSPC insiders, it is a major setback for the state PSU, which wanted early implementation of the Rs 2,030 crore facilities, needed for commercial production of less than 2 tcf of gas it has finally unearthed, as against the earlier claim of 20 tcf.
A previous meeting of the EAC in May, too, had asked the GSPC to “defer” construction commercial facilities until certain conditions were fulfilled. It refused to give blanket CRZ clearance for laying down underground gas pipeline, optical fibre cable (OFC), an effluent disposal pipeline, and process-cum-living quarter platform and captive power plant – all of which would require CRZ clearance, as these facilities are to be part of the Yanam-Puducherry coastal region. The GSPC wanted all these to be cleared together but the EAC ruled against it, asking the GSPC to make separate applications.
The EAC note, which refused the CRZ clearance, regretted in May how, without necessary clearances, the GSPC began "physical construction work for field development." It wanted the GSPC 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. Based on these observations, it recommended to defer the proposal. "The proposal shall be reconsidered after the above observations are addressed and submitted”, the note said.
The EAC decision to ask the GSPC to defer its Rs 2,030 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 and kickstarting construction work. It asked GSPC executives to “stop work” of laying down a crucial submarine pipeline to take gas from KG Basin to its onshore gas terminal via an area which is inside 10 km of the Corianga sanctuary without necessary clearances. It wanted to know “why action shouldn’t be taken” for violating forest and wildlife laws.
Insiders said, GSPC executives goofed up as they demanded environmental clearance and thought that was “enough.” After nearly two years, its top bosses found that environmental clearance was not enough, and that forest and wildlife clearance, as also CRZ clearance, under their respective Central laws, would also need to be taken, without which KG Basin gas cannot reach onshore gas terminal. “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 onshore gas terminal was under progress at Mallavaram, and nearly 30 per cent of it had been complete. Under instructions of chief minister Narendra Modi, the terminal, 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 by prematurely announcing 20 tcf of gas having been 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.