IndianOil (IOC) will commission its first natural gas pipeline by the end of May. The 30 inch diameter pipeline will run 132 km from GAIL’s Dadri pipeline network terminal in Uttar Pradesh, passing through the Ghaziabad and Bagpat districts before reaching Sonipat and terminating at IOC’s Panipat refinery.

The $US57 million pipeline project will initially supply regasified LNG as a replacement to the Naptha currently being used as fuel at the Panipat refinery. IOC said that regasified LNG will provide an economical means of feeding natural gas to its refinery.

Later, natural gas will be supplied from Reliance Industries’ D6 Block located in the Krishna Gadavari (KG) Basin. IOC has signed a gas transportation agreement with GAIL for the supply of KG Basin gas to IOC’s pipeline.

The pipeline will have an initial capacity of 1.5–2 MMcm/d, and is expected to achieve full capacity of 10 MMcm/d by October 2010.

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IOC has said that it sees gas pipelines as a major growth area in the future. “The gas market in India is expanding fast, thanks to enhanced availability of gas from indigenous sources and through imports,” said IOC Director Pipelines P.K. Chakraborti.

In addition to the Panipat refinery, IOC is currently in the process of converting its refineries in Koyali and Mathura to natural gas.