Media Center

News Release

Email this   printer friendly format

ADB Approves US$150 Million Loan For LPG Pipeline Project In India

The availability of Liquified Petroleum Gas (LPG) in northern India will be improved by a US$150 million loan approved today by the Asian Development Bank.

The LPG Pipeline Project will construct a pipeline system to transport LPG from the western to the northern region of India. It offers the least-cost method for transporting LPG over long distances, improves the reliability of LPG supply and reduces greenhouse gas emissions.

The pipeline system will consist of a 1,015-kilometer trunk line and a 156-km. feeder line; pumping facilities at a dispatch station and three booster pump stations; supervisory control and data acquisition system; a telecommunication system; and human resource development. The pipeline will have an initial capacity of 1.7 million tons per annum (MMTPA) and will support the required movement of LPG from the ports and local production centers to inland areas.

The total cost of the project is US$364 million equivalent , of which the Gas Authority of India Limited (GAIL), as the executing agency, will shoulder US$146.8 million equivalent while US$8.8 million equivalent will be raised from local banks. It is expected that the ADB will assist GAIL in arranging parallel cofinancing from international commercial banks to finance the balance of the foreign currency cost of US$58.8 million, its first internationally syndicated commercial loan.

The US$150 million ADB loan will come from the Bank’s ordinary capital resources with a repayment period of 15 years, including a grace period of 4 years, with interest determined in accordance with the Bank’s variable lending rate system for US dollar loans.

The project has strong environmental and social benefits. The LPG users will benefit from the enhanced availability of clean, convenient and efficient domestic fuel that produces lower greenhouse gases than competing fuels. The environment will also benefit from the absence of significant amount of vehicular emission and inhalable particulate matter that would result from the use of over 3,000 road tankers in the absence of the project.

Contacts