Gas Pipeline Project Goes Full Steam Ahead
Gas Authority of India delivers Vijaipur-Dadri-Bawana Gas Pipeline Project below projected cost and on time.
BY PANCHALEE THAKUR
India is faced with the twin problem of enhancing power generation to support growing industries yet containing environmental pollution from power facilities run on coal. A more viable alternative is natural gas that has earned the “fuel of the 21st century” tag. Natural gas emits 6 and 42 percent less carbon dioxide than coal and oil, respectively. It also does not come with waste disposal and safety hazards as in nuclear energy. Besides importing, India wants to meet the demand by augmenting supply from the domestic reserves of natural gas.
One such project is the Vijaipur-Dadri-Bawana Gas Pipeline Project by GAIL (India) Limited, earlier known as Gas Authority of India Limited. This project, undertaken in 2007 to upgrade the capacity of its pipeline network in north India, won GAIL the PMI India Project of the Year 2011 Award at the PMI India National Conference in September.
Project Charter and Scope
The pipeline project was designed to connect GAIL’s natural gas terminal in Vijaipur in Madhya Pradesh in central India to a terminal in Dadri in Uttar Pradesh in north India. It would then extend to a power plant in Bawana that supplies power to Delhi. The project was part of GAIL’’s infrastructure enhancement program aimed at integrating the country’s gas grid.
GAIL makes up for 78 percent of India’s gas transmission needs and has a total of around 8,600 km of high-pressure natural gas trunk pipeline network. This project has added a network of 592 km from central India to north India.
The project charter included the following key objectives:
- Upgrading the capacity of the existing pipeline network from 20 to 80 million metric standard cubic meters per day downstream of Vijaipur
- Evacuation of extra gas from Petronet LNG Ltd., Dahej and Reliance Industries Ltd.’s KG-D6 offshore project
- Supplying gas to customers in Haryana, Punjab, and Uttaranchal in north India through the Chainsa-Jhajjar-Hissar Pipeline, Bawana-Nangal Pipeline, and Spurline and Karanpur-Moradabad-Kashipur-Rudrapur Pipeline
- Commence gas supply to Pragati Power Corporation Ltd.’s Bawana Power Plant and New Delhi Power Plant being set up to enhance power supply in the Delhi region before the start of the 2010 Commonwealth Games in New Delhi
The GAIL board of directors approved the project in November 2007 for an estimated cost of Rs. 4,262 crore. GAIL appointed Engineers India Limited (EIL) to manage the project. It was a highly challenging project that involved five states, Madhya Pradesh, Rajasthan, Uttar Pradesh, Haryana, and Delhi. To carry high-pressure gas, the pipeline network would cross 291 villages in these states and several physical obstacles like rivers, forested area, and wildlife sanctuaries. The project required land or Right of Use (RoU) to build 24 sectionalizing value stations and intermediate pigging stations. Sectionalizing valves allow pipeline sections to be closed and isolated from the rest of the network so as to stop the release of gas to a section in case of a leak or rupture. A pig is a device that cleans the insides of the pipeline and is propelled through the pipeline by the natural gas inside it. Intermediate pigging stations launch and receive these devices.
Construction involved laying of 592 km of carbon steel cross-country pipeline that is internally and externally coated to prevent metal corrosion and the installation of 24 sectionalizing valve and intermediate pigging stations. All along the pipeline route, EIL laid an optical fiber cable network for voice and data transmission. Data received through this network would help manage and monitor the pipeline from the designated control rooms. The other main features included installation of a cathodic protection system, supervisory control and data acquisition system (SCADA) and telecom system, gas metering stations, and a solar power system. Cathodic protection prevents the buried pipeline from corrosion, SCADA helps in managing the network remotely, the telecom system helps in maintaining communication channels, gas metering stations have devices to measure the flow of natural gas in the pipeline, and solar power systems generate power to operate these various systems along the pipeline route.
The pipeline passed different terrains and posed a host of challenges for the team. Explaining some of the key challenges faced, Mr. Asim Prasad, chief manager—project execution, GAIL said, “The pipeline section between Vijaipur and Dadri was being laid in the RoU where there was a pre-existing operational pipeline. Safety was of paramount importance. Heavy monsoon brought work to almost a standstill for over two months during 2009 and 2010. We faced stiff resistance from farmers and landowners in Baghpat and Dadri. It resulted in slow progress and disbursement of compensation at a much higher rate than what had been envisaged earlier. The Chambal River strata turned out to be very tough and the task of horizontal directional drilling was technically and physically challenging. Chambal is a stronghold of dacoits (highway robbers) and the construction team received many threats from dacoits. We completed the work under police protection.”
How Project Management Helped
Meticulous planning, close monitoring, and fast resolution of issues ensured the project proceeded on time in spite of unforeseen challenges.
GAIL had prepared a Detail Feasibility Report (DFR) along with the financial appraisal report after project conceptualization. The DFR involved aspects such as selection of pipeline route, line pipes, cost estimates for rights of use and land acquisition, and procurement and work packages. As the project plan was put before the GAIL board for approval, the team set the ball rolling with pre-project activities like surveys and soil-testing. Selection of the project manager and project team at the corporate office was also completed before project approval. The main criterion for selecting the team and project manager was experience in successful project completion. By the time construction started, the company had placed two multidisciplinary teams with core competence and experience in pipeline projects. One team was in New Delhi for project execution at the corporate level and the other at the site for construction activities.
Construction constituted 28 percent on the work
breakdown structure, the highest among all the elements
Stakeholder management was a crucial aspect of the project. “The stakeholders were segregated into groups based on their expectations, demands, degree of influence, participation, and criticality at various stages of the project. We conducted a stakeholder analysis to understand the level of influence, participation, and criticality of each major stakeholder,” said Mr. Prasad. This analysis helped manage stakeholders’ demands and expectations during the project. GAIL also communicated periodically with the stakeholders updating them on project status. The team spent significant effort in holding meetings with farmers, land owners, statutory authorities, and government officials to convey the objectives, status, and benefits of the project.
The project was divided into nine work breakdown structure (WBS) elements and a schedule prepared to monitor project progress. In monthly progress reviews, reasons for any backlog in the WBS elements were identified and catch-up plans drawn up. The highest weightage in the WBS was accorded to construction (28 percent), followed by manufacturing (25 percent), ordering (15 percent), and tendering (10 percent). The weightages were assigned based on past experience and best practice.
Some of the other measures taken to speed up work were an electronic file movement system that tracked proposal files for the project, a bill watch system to track bills submitted periodically by vendors and contractors, and an electronic e-payment system for release of payment to vendors and contractors. Periodic reviews of project progress conducted at various levels helped monitor progress and resolve issues to cut delays.
“The project manager and project team were stationed at the corporate office in New Delhi. We followed a strong matrix organization structure during project execution to align the project WBS with the organization structure,” explained Mr. Prasad. Manpower and capital were assigned to each of the work packages and responsibility was fixed in line with the breakdown structure. “In any natural gas pipeline project, timely ordering and supply of coated pipe is a challenge. Accurately dividing the entire pipeline into sections helped in resource levelling during pipeline construction.”
There was, however, one surprise in store for GAIL, albeit a pleasant one. In June 2009, due to a fall in steel prices, the GAIL management decided to take call for tenders again. Steel prices had fallen 50 percent in the global market and re-tendering could mean significant savings for the current project. The total amount of steel pipes the project required was 100,000 tons. GAIL realized a 19 percent savings on the total project cost due to better steel prices. “Steel is a major constituent used for manufacturing different components of pipeline projects like line pipe, valves and other line material. By the time the order was placed for these items, the steel market had gone into a recession mode. This helped achieve cost savings, which impacted the total cost of the project,” explained Mr. Prasad.
Risk management is the other key aspect in a project of this nature due to the interplay of a large number of external factors. At the pre-construction stage, the risks that could delay the project were delay in land acquisition, approvals or clearances, delay in start of work, delay in finalization of key contracts, and funding risks. During construction, the risks were categorized under the followings: engineering, technology, equipment supplier, contractors’ failure, project cost, completion, foreign exchange, infrastructure, and force majeure. At the operation stage, the uncertainties could come from operating costs, inflation, environmental factors, and gas availability and demand. GAIL overcame these risks with detailed planning, close monitoring of project progress, and effective communication.
Socioeconomic Benefits from this Project
Even though the final closure order is still in process, the commercial operation of the pipeline has commenced. The pipeline network resulted in the following benefits:
- Reduced the supply–demand gap of natural gas in north India
- Supply gas to fertilizer plants en route, thereby giving them access to cleaner and cheaper fuel
- Helped in the creation and development of new industrial hubs along the pipeline route
- Led to socioeconomic development of backward areas
- Provided additional direct and indirect employment in the region
- Ensured reduction in emissions due to the supply of ecofriendly fuel
- Created an uninterrupted, safe, and reliable mode of transportation of gas
- Provided revenue generation for the state governments over the entire life of the project
Explaining the benefits, Mr. Prasad said, “Natural gas has many uses. It is used as a raw material and feed stock in industries, piped natural gas in the domestic sector, and compressed natural gas in the transportation sector.” In the years ahead, the pipeline project is expected to help in the economic development of areas through which it passes.
Public sector projects in India often languish with cost and time overruns. The GAIL pipeline project, aimed at infrastructure enhancement of the country, sets an example for similar large public sector projects to follow. GAIL demonstrates that with project management, large projects can overcome risks associated with managing multiple stakeholders, a host of external risk factors, and a globally dispersed supply chain.