Senior officials displaying the signed agreement document. Credit: © Indian Oil Corporation Ltd.

Five Indian state-owned oil and gas companies have signed a joint venture (JV) agreement for the execution of the Rs60bn ($871.87m) North-East Natural Gas Pipeline Grid project in the northeastern part of the country.

The JV participants include Indian Oil (IOCL), ONGC, GAIL, Oil India and Numaligarh Refinery (NRL), with each company contributing equally.

The 1,500km grid project will connect the capital cities of all the eight northeastern states, namely Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.

Under the terms of the JV deal, the partners will develop, build, operate and maintain the natural gas pipeline grid linking Guwahati, Assam, and other major North-Eastern cities and load centres such as Numaligarh Refinery.

“GAIL’s gas pipeline running from Barauni to Guwahati will connect Gangtok with Siliguri.”

Subject to feasibility, the project will also integrate regional gas producing fields and is scheduled to be commissioned within four years, including one year for pre-project activities.

In addition, it will be connected to the National Gas Grid through Barauni-Guwahati Gas Pipeline, which is being laid by GAIL and set to be commissioned by 2021, according to a source cited by The Economic Times.

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The proposed route of the pipeline comprises Guwahati to Numaligarh, Dimapur, Kohima and Imphal in one direction; Shillong, Silchar, Aizawl and Agartala in the second direction; and to Itanagar in the third direction.

Meanwhile, GAIL’s gas pipeline running from Barauni to Guwahati will connect Gangtok with Siliguri.

The northeastern gas pipeline grid project is part of the government’s aim to bring the north-east under the natural gas grid and is being implemented under the Urja Ganga Gas Pipeline Project.

Being developed at a cost of Rs129.4bn ($1.88bn), the Urja Ganga project is expected to meet the energy demands of 40 districts and 2,600 villages covering five eastern states, namely Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal by 2020, media sources reported.

In January, the government approved the project extension to the northeastern states.