Completion of Expansion of GAIL's Dahej-Vijaipur Pipeline Delayed Six Months

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Researched by Industrial Info Resources (Delhi, India)--Phase II of GAIL (India) Limited's (BSE:532155) (New Delhi) Dahej-Vijaipur Pipeline, which includes the capacity augmentation of the existing Dahej-Vijaipur Pipeline, has fallen behind schedule by six months. The project, which will require capital expenditure of approximately $1 billion, was scheduled to be completed in April. However, the completion date has been revised to September 2011.

Phase I of the 610-kilometer pipeline from Dahej-Vijaipur was commissioned in April 2004 and has a capacity of 35 million standard cubic meters per day.

The second phase of the project includes construction of a parallel 48-inch, 610-kilometer pipeline from Dahej to Vijaipur to increase the capacity from 35 million standard cubic meters per day to 60 million standard cubic meters per day.

All purchase and work orders for Phase II have been placed. The present spread is being constructed by Fernas Construction Company of Turkey. Line pipe manufacturing is completed, and construction is in progress. About 567 kilometers of pipeline welding has been completed, and 416 kilometers of hydro-testing has been completed. Hydro-testing of spreads 4 and 5 has been completed.

The project was delayed principally because of farmers' demanding high prices for the land that was acquired for the project. Court cases were also filed by the farmers, which brought work to a standstill. A settlement has been reached now, and construction has resumed, although this issue significantly delayed the project.

On the financial side, about $320 million had been spent on the project up to March 15, 2011, compared to an anticipated cost of $500 million for the current phase. The project has achieved 89.5% completion, against the anticipated 90% completion anticipated in the revised construction schedule.

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