SUMMARY ENVIRONMENTAL IMPACT ASSESSMENT

LPG PIPELINE PROJECT

IN

INDIA

May 1997

CURRENCY EQUIVALENTS(as of 13 May 1997)

Currency Unit – Rupee/s (Re/Rs)Re1.00 = $.0286$1.00 = Rs35

For the purpose of calculations in this Report, an exchange rate of $1.00 = Rs35 hasbeen used.

ABBREVIATIONS

BOD — Biochemical Oxygen DemandCO — Carbon MonoxideCOD — Chemical Oxygen DemandEIA — Environmental Impact AssessmentEIRR — Economic Internal Rate of ReturnGAIL — Gas Authority of India Ltd.HC — HydrocarbonLPG — Liquefied Petroleum GasMOEF — Ministry of Environment and ForestNOx — Nitrogen DioxideO&M — Operation and MaintenanceOISD — Oil Industry Safety DirectorateROW — Right of WaySCADA — Supervisory Control and Data AcquisitionSEIA — Summary Environmental Impact AssessmentSO2 — Sulfur DioxideTDS — Total Dissolved Solids

WEIGHTS AND MEASURES

cm — centimeterdBA — audible decibelkcal — kilocaloriekm — kilometerl — literm — metermg — milligrammm — millimeterMMTPA — million metric ton per annumppm — part per million

NOTES

(i) The fiscal year (FY) of the Government and its agencies ends on 31 December.(ii) In this Report, “$” refers to US dollars.

CONTENTS

Page

A. Introduction 1

B. Description of the Project 1

C. Description of the Environment 4

1. Physical Environment 42. Biological Environment 73. Human Environment 9

D. Anticipated Environmental Impacts and Mitigation Measures 9

1. Construction Impact 102. Operational Phase 12

E. Alternatives 16

F. Cost-Benefit Analyses 16

G. Institutional Requirements and Environmental Monitoring Program 17

H. Public Involvement 18

I. Conclusion 19

A. Introduction

1. The Environmental Impact Assessment (EIA) study of the LPG Pipeline Project inIndia was carried out by Engineers India Ltd. (EIL), New Delhi for the project sponsor, GasAuthority of India Ltd. (GAIL). The base—line studies had been carried out by experts from the (i)National Remote Sensing Agency to determine land use patterns within one kilometer (km) oneither side of the pipeline route; (ii) Salim Ali Centre for Ornithology and for Natural History — toevaluate the project's impact on flora and fauna using the recognizance and quadratic method; (iii)Industrial Toxicological Research Centre — to assess quality of the air, water, and soil along thepipeline route; and to gather population statistics; and (iv) Indira Gandhi Institute of DevelopmentResearch — for socioeconomic impact assessment. From 23 February to 7 March 1997, aBank's environment specialist visited critical areas of the project identified in the EIA.

2. The EIA has been submitted to the Ministry of Environment and Forest (MOEF)and has been taken up by its Appraisal Committee; a No-Objection certificate is expected beforethe third quarter of 1997. The original EIA was done in conformity with MOEF's requirement,which assumes a project's impact area at a 25-km radius regardless of the size and type. A riskanalysis was carried out by EIL, which showed that the project's impact is limited to a maximum of200 meters (m) on both sides of 400 millimeter (mm) diameter pipe, and 100 m for 150-mm pipe.The Bank has requested GAIL to prepare a more detailed investigation of the critical areasidentified by the risk analysis and to include it as an addendum to the main EIA report. The Bankhas classified the Project under category A, a project with potential significant environmentalimpact if proper mitigation measures are not included in the design, construction, operation, andabandonment procedures. Under the Bank's Environmental Assessment Requirements andReview Procedure, this Summary Environmental Impact Assessment (SEIA) is circulated to theBank's Board of Directors 120 days prior to their consideration of the loan proposal. The main EIAreport and addendum are available at the project office on request. The EIA and this SEIA wereprepared by GAIL and have not been evaluated by the Bank. The Bank's assessment andevaluation of the report and environmental impacts related to the project will be included in thedocumentation when the project is considered by the Board.

B. Description of the Project

3. Liquefied petroleum gas (LPG) is used for domestic fuel in India, where thedemand is concentrated in the northern, central, and western regions. Locally, LPG is producedby GAIL, Oil India Limited, Oil and Natural Gas Corporation, and India Oil Corporation fromnatural gas and oil refineries. At present, demand for LPG is higher than local supply, and thedeficit is projected to increase further, especially in the northern region in areas close to Delhi. Thedeficit is filled by imports from the Gulf States. Imported LPG is landed in Kandla and Okha portsin Gujarat and transported by truck to the northern, and western regions. At present, 2.0 millionmetric tons per annum (MMTPA) of LPG is imported; 1.8 MMTPA is transported by truck and 0.2MMTPA by rail from Kandla and Okha, which are both approximately 1000 km from Delhi.

4. The need to transport LPG by truck and rail has already put tremendous pressureon the railway and highway networks. LPG has to be transported in pressurized tanks. It is heavierthan air, and leaks could spread on the ground up to 200 m before it is diluted by air below itsexplosive and flammable concentrations. Kandla and Okha ports are the major ones in westernIndia and are also used for shipment of fertilizer, steel, cement, oil, salt, and other industrial andcommercial produce. The transport of LPG not only results in congestion of highways but also

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poses a serious threat to drivers and communities along the route in case of accident.Accordingly, the development of an LPG pipeline starting from Kandla and Okha ports up to Loni,some 30 km north of Delhi, has been given high priority by GAIL to facilitate transportation ofimported LPG — and of LPG locally produced at Hazira, Gandhar, and Jannagar — to thenorthern region.

5. The pipeline will consist of (i) 1,708 km of 150-mm and 400-mm steel pipeline;(ii) five dispatch terminals at Kandla, Okha, Jannagar, Hazira, and Gandhar; (iii) seven tap-offstations at Haryala, Palanpur, Ajmer, Jaipur, Piyala, Madanpurkhadar, and Loni; and (iv) threeintermediate booster stations at Samakhiali, Palanpur, and Ajmer plus one between Palanpur andAjmer. At the dispatch terminals at Kandla, Okha/Sikka, Hazira, Gandhar, and Jannagar thefollowing facilities will be provided: (i) booster pumps to mainline pumps; (ii) two electric motor-driven booster pumps, one operating and one standby, to be provided upstream of the mainlinepumps; (iii) mainline pumps and intermediate booster station pumps; (iv) basket strainer; (v)storage facilities; and (vi) metering system. At each tap-off station, the facilities such as pigreceiver/launcher, metering, pressure reduction control valves, basket strainers, and densitymeter will be provided. For adequate control and for safe pipeline operation, a supervisory controland data acquisition (SCADA) system will be provided at Pyala terminal. The proposed pipelineroute and schematic of the system are shown in Figure 1.

6. Initially, the pipeline will have a capacity of 2.6 MMTPA. By 2007 (Phase II), thepipeline capacity will be increased to 3.7 MMTPA with the addition of pumping facilities at Okhaand additional pipelines from Okha to Jamnagar. GAIL has requested Bank financing for Phase I.

7. The land along the right of way (ROW) will be cleared of vegetation and debris in astrip 10-m wide on both sides of the pipeline, which will be reduced to 5.5 m near the 0.5-kmstretch of mangrove swamp on the Hazira-Patan route. The pipe will be buried at least 1.0 munderground. The trench for laying the pipe will be dug to a suitable width and about 2 m deepusing mechanical trenchers. In agricultural areas, the top 0.25 m of soil will be retained andreplaced; on replacement it will expand to 0.3 m. The pipe sections will be placed end to end andwelded together to form a string. The string will be subjected to radiography to determine weakpoints. The pipe string will then be lowered into the trench over a bed of 15-centimeter (cm) thickfine sand and will be hydrotested for leaks. The fine sand layer will cushion the pipe and facilitatealignment of the pipe segments. Thereafter, soil and fine sand will be used as filler up to a heightof 15 cm above the pipe crown. If the excavated soil is free of rocks and stones, the pipeline willbe laid directly on the soil; the 15 cm of sand underneath it will not be required. The trench will bebackfilled with the excavated soil. Except for the top 0.2 m, the excavated soil will be backfilled,levelled, and compacted in layers of 0.2 m to prevent subsidence and stress on the buried pipe. Inthe top 0.2 m, the excavated topsoil will be used for backfilling up to a height 0.1 m above thenatural ground. The topsoil will not be compacted mechanically.

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(Figure 1)

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8. The pipe ROW may not be used for planting trees, for house construction, or forany permanent structure. The land may be used for wheat, vegetables, oil crops, and other plants.Figure 2 shows the schematic of the various activities to be undertaken during pipelineconstruction. The ROW will be 20 m.

9. Pipeline construction across small rivers will be done by the open cut method. Allthe small rivers along the pipeline route are seasonal, and construction will be done during the dryseason. The open cut method is similar to the trenching method previously described except thatembankments are provided to prevent flooding of the trenches in case of off-season floods. In allthe major rivers, the horizontal directional drilling method will be used: A tunnel will be drilledunder the river and the pipe will be pushed into the tunnel as the drilling progresses. Thepipelaying operation will not interfere with the river flow, nor with the river ecosystem.

10. Markers will be placed at each stream or river crossing and turning point. Kilometermarkers will be placed every 1 km, and aerial markers every 5 km. The marker post will beapproximately 0.05 m in diameter, while the signboard will be approximately 0.3 m in diameter.The aerial markers will normally be laid horizontal to the ground to facilitate identification of thepipeline from the air.

C. Description of the Environment

11. The pipeline will stretch from Kandla Port; through the salt pans of Gujarat; desertsand wastelands of Gujarat and Rajasthan; farmlands in Gujarat, Rajasthan, Haryana, and UttarPradesh; and along the irrigation canals in Uttar Pradesh and Rajasthan. The area is generallythinly populated, although the land is extensively cultivated, close to major rivers, and there areclusters of thickly populated areas. In cultivated and populated areas, the pipeline will follow theirrigation canal's ROW wherever possible. In its 1,708-km route, the pipeline will traverse 1,328km of agricultural land, 318 km of wasteland, 19.7 km of salt pans and mud flats, 0.6 km ofdegraded forest land, 0.5 km of mangrove forest, and 16.08 km of stream and river crossings. Asummary of land uses in the various pipeline sections is shown in Table 1.

1. Physical Environment

12. Methane and nonmethane hydrocarbon (HC) values were measured at differentlocations along the pipeline route as shown in Figure 3. The sampling locations were primarilyareas with high industrial activity or vehicular traffic such that the background concentration mighthave been close to critical levels. The average methane concentration ranged between 1.18 and2.42 parts per million (ppm), and nonmethane HC between 0.09 and 2.36 ppm. The observedvalues are attributed to vehicular emissions from highways.

13. The water quality was analyzed for physical, chemical, and biological parameters.The pH (negative logarithm of the hydrogen ion molar concentration) of the water samples wasrecorded between 7.6 and 8.27, showing the alkaline nature of the water. The dissolved oxygencontent was 5.68-6.68 milligrams per liter (mg/l). The values may be attributed to the rise in watertemperature during the summer months, but there is no danger to aquatic life at these levels. Thebiochemical oxygen demand (BOD) values ranged between

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(Figure 2)

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(Table 1)

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2.43 and 8.23 mg/l and the chemical oxygen demand (COD) between 9.42 and 15.57 mg/l. Totaldissolved solids (TDS) in the range of 172.8-224 mg/l were detected and are within thepermissible limits for irrigation water. No odor was detected in the sample. HC were either absentor below the detection limit. The pipeline will cross a number of rivers and streams. The majorwater bodies crossings along the pipeline route are the Narmada, Mahisagar Sabrmati, andYamuna. The locations of the water sampling points are also shown in Figure. 3.

14. Seawater samples were taken at Kandla and Okha ports. The seawater was freefrom odor, and the pH was in the alkaline range. Turbidity was above 30 Nephelometric turbidityunits in both samples. TDS were very high, as expected, with the average value in the Okha andKandla samples at 26,102 and 31,096 mg/l, respectively, which is due to the presence of salt andother dissolved minerals. The dissolved oxygen level remained fairly uniform between 5.81 and6.01 mg/l. BOD and COD were recorded in the ranges of 8.48-10.13 and 21.04-24.26 mg/l,respectively. The average HCs recorded for the Okha and Kandla samples were 1.73 and 3.46mg/l, respectively. The presence of HCs may be attributed to discharges from motorboats/ships,etc. around the port.

15. The groundwater samples were free from odor, and the pH ranged between 7.37and 8.42. The dissolved oxygen levels, as expected, were low, ranging between 2.93 and 5.78mg/l. TDS were well within the permissible limit except at Pyala, where a hand pump sampleshowed 2,167 mg/l, and at Okha, where a shallow well showed 1,225 mg/l. BOD values averagedbelow 3.7 mg/l, whereas COD ranged between 2.88 and 11.6 mg/l. HCs were either absent orbelow the detection limit.

16. Soil samples were collected from different locations along the pipeline as shown inFigure 3. Soil samples were collected from agricultural as well as barren lands to assess existingsoil quality. The bulk density of soils ranged from 1.33 to 1.47 grams per cubic centimeter. Thebulk density is affected by the organic matter content. The bulk density is within the normal rangefor agricultural crops. Porosity in the soil samples was found to be in the normal range between43.6 and 50.6 percent. The soils had sand, silt, and clay in the range of 8.4-81.8, 3.3-54.0. and11.5-51.6 percent, respectively. Consequently, the texture of the soils ranged from loam to sandyclay loam.

2. Biological Environment

17. The pipeline will not pass through any wildlife sanctuary or national park. Inagricultural areas, the main crops are maize, groundnut, cotton, paddy, wheat, gram, pulses, andvegetables. In some sections of the irrigation canals' ROW, trees have been planted by theirrigation department. The trees are generally small species whose root systems could not affectthe irrigation canal embankments. The main planted trees are Acacia arabica and various speciesof eucalyptus. Some of the degraded forests are still classified by the Forestry Department ofMOEF as reserves or protected forests. The degraded forests are mostly treeless; grassland orscrubland is a more appropriate classification. A total of 231 plant species were recorded alongthe pipeline route and its environs, including 66 species of trees, 36 shrubs, 14 climbers, and 115herbs.

18. The fauna in the area traversed by the pipeline are those related to cultivatedlands. Domesticated animals are goats, sheep, camels, and horses. It is estimated that 51 wild

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(Figure 3)

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species are found along the pipeline route consisting of 2 amphibians, 14 reptiles, 24 birds, and11 mammal. This estimate was confirmed during discussion with local experts who have observedthe area for a longer period than the EIA study.

19. The coast around Kandla Port is sandy and abundant with bivalves such asKatelysia opima, Donex cunniatus, and Cardium sp., and with gastropods. Crabs are found inmuddy intertidal areas. The large expanse of the salt pans is one of the major reasons for thepoor biodiversity of the area. The salt pans contribute little to the fertility of the marineenvironment.

3. Human Environment

20. The pipeline route was selected to bypass densely populated areas, villages, andimportant historical sites. However, it was difficult to avoid clusters of houses within the 200 mcritical areas identified in the risk analysis. A survey was conducted to determine thesocioeconomic profile of the villages within 1 km from the pipeline. The survey included housesthat would not be affected by the project even in an accident. However, there will be some impactin terms of the influx of migrant workers, food supply, and necessities during construction andemployment during construction and operation and maintenance (O&M). For this reason thesocial profiles were obtained for a wider area.

21. In general, the villages within 1 km of the proposed pipeline route are consideredremote ones, although a number of them have experience with working for a pipeline project orwith disruption of their agricultural activities during pipe laying. More than 85 percent of villagesalong the pipeline route have access to drinking water (tap and hand pump). Communicationfacilities are limited, with few villages having a telephone facility. Although rural electrification hasreached 80 percent in Gujarat and 50 percent in Haryana, it is minimal in Rajasthan. The villagesin Rajasthan are very small and widely dispersed. On the average, the population density in areasclose to the pipeline in Rajasthan is only 262 persons per square kilometer. Around 15 percentand 24 percent of the villages of Gujarat and Rajasthan, respectively, reported a female to maleratio of more than 1.0 compared with the national average of 0.927. However, most of the villageshave a female to male ratio as low as 0.617. The literacy rate of the villages along the routeranges from 39 to 48 percent. Agriculture is the main source of livelihood. Around 50 percent ofthe villages in each state have only a primary school. The health care system in most villages isinadequate or non-existent: No primary health care facilities are available in more than 70 percentof the villages close to the pipeline in Haryana and Rajasthan, although in Gujarat almost 85percent of the villages have access to some form of health care services.

D. Anticipated Environmental Impacts and Mitigation Measures

22. The main negative impact of the project will be during construction from(i) movement of heavy equipment for trenching and transport of pipes, (ii) trenching activitiesincluding storage of excavated materials, (iii) movement of personnel, and (iv) construction of thepump house and take-off stations. The area affected by the project during construction is theROW for the construction equipment, the pipeline trenches, area for the storage facilities,pumping stations, and take-off stations. During O&M of the pipelines, the main impact of theproject would occur in case of an accident. After rehabilitation of the pipeline ROW, the residualimpact of the project will be limited to the small areas occupied by the markers. As mentionedearlier, LPG is heavier than air. Leaks in the pipeline and in the take-off and storage facilities

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would not be dispersed in the atmosphere but could travel considerable distances before beingdiluted to concentrations below the flammable limits. While the pipeline is expected to operate fora long time, it must be properly purged before abandonment to prevent accidental explosion fromresidual LPG.

23. The dispatch stations will be built within the existing premises of the LPGmanufacturers and the importers' tanks farms at Kandla and Okhra ports. GAIL does not have theauthority or license to market LPG to the public. The LPG distributors and marketing agents haveexisting bottling facilities, where they transfer the LPG from the trucks to bullet tanks. The LPG istransferred from the bullet tanks to 14-30 kg steel bottles for sale to the public. The project willinvolve construction of spur lines to those bottling facilities that are shown in Figure 1 as take-offfacilities. Take-off facilities will be built by the bottlers considering compatibility with the existingand proposed storage and bottling facilities. Some of the LPG distributors in major cities such asJaipur are planning new facilities farther from the city center, as their existing facilities have beenovercome by the expansion of the urban area. The location of the new facilities is not included inthis project; however, GAIL will require the owners of the new facilities to submit copies of safetyand environmental clearances, permits, and licenses before a spur line will be built.

24. The project will have a positive impact during operation by (i) reducing the risk fromroad and railway accidents involving tankers filled with LPG, (ii) reducing indoor air pollution in thepremises of LPG users, (iii) creating employment opportunities in remote villages, (iv) improvingthe reliability of energy supply and at a lower cost, and (v) preventing significant vehicularemissions from road tankers, which would otherwise be required for transporting the LPG.

1. Construction Impact

a. Physical Environment

25. The mechanical equipment, trucks, and electric generator sets for the weldingmachines will produce pollutants such as dust; carbon monoxide (CO); nitrogen dioxide (NOx);and sulfur dioxide (SO2) from fuel combustion. These pollutants will be produced for only 3-5 daysand will be restricted to the construction site. On good terrain a pipe-laying crew can lay 3-4 kmper day. However, the trench is not backfilled until the pipe has been inspected and tested. Waterspraying will be carried out periodically for suppressing dust. The CO, NOx, and SO2 will bedispersed in the atmosphere. The pipelaying operation is carried out mostly in the open space,and the dispersion of the emissions from the heavy equipment is not expected to pose anyserious problem. The operation of mechanical equipment will also generate noise. The noise forthe generator and air compressors could reach 80-90 audible decibels (dBA) 1 m from theequipment. As the pipelaying operation is carried out in remote and sparsely populated areas, thenoise is not expected to pose any problem. However, if farmhouses or clusters of houses arewithin 100 m of pipeline construction, the noisy equipment will be operated only during daytime.The noise from the heavy equipment is reduced to 60-70 dBA at distances of 100 m in open field.The noise reduction is higher if vegetation is present. The noise is temporary and confined to theconstruction site.

26. The pipeline will cross a number of water bodies, of which most of the streams areseasonal. For these seasonal streams, the pipeline will be laid by the open cut method. Theimpacts associated with this are related to the washing away of sediments at the pipeline

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crossings. Major rivers along the pipeline (i.e., Narmada, Mahisagar, Sabarmati, and Yamuna) willbe laid by the horizontal drilling technique. To minimize the impact on water quality the followingmitigating measures will be taken: (i) pipe will not be installed during rainy season so as to lessenthe problems caused by soil erosion, (ii) the banks of waterways will be reinforced with concrete,and (iii) the major rivers will be crossed using the horizontal drilling technique. The minimumquantities of water required during construction will be made available from nearby water bodiesor groundwater as suitable. There will be temporary and insignificant impacts during theconstruction period.

27. The land required during pipeline construction will be predominantly agricultural.Proper compensation will be paid to landowners for acquisition of ROW and loss of crops. Thecompensation rate and payment schedule are fixed by the Petroleum and Hydrocarbon Act of1972. Farmers are paid for the crop loss during the season plus a premium equivalent to 10percent of the land's value. While the farmers were satisfied with the payment for the crop lossduring construction, they complained that the soil will be compacted by the heavy equipment,lowering the productivity of the area covered by the pipeline ROW for an extended period. GAILwill include in the environmental management and monitoring team an agronomist, who will reviewthe conditions of the soil in agricultural areas affected by pipelaying. The agronomist will consideroptions to rehabilitate the soil to conditions equal to or better than the conditions prior to theconstruction of the pipeline. Those options may include (i) deep plowing to loosen the soil, (ii)addition of compost and fertilizer to overcome the lower fertility from loss of topsoil, and (iii) adviceto farmers on suitable alternative crops.

28. As part of its environmental management system, GAIL will require all itscontractors and their subcontractors to maintain their work areas properly. Spent oil and greasewill have to be stored in suitable containers and returned to the service stations. The spent oil andgrease should not be thrown or disposed of on land or water. The construction contract willinclude provision of penalties and disciplinary action for contractors or subcontractors who do notmaintain proper sanitation and environmental conditions in their working areas. The contractorswill also be briefed on the conditions imposed by MOEF on the project, the potential problems andmitigation measures as outlined in the EIA report, and their obligations in meeting thoserequirements.

b. Biological Environment

29. The pipeline ROW will be cleared of shrubs, undergrowth, and trees. A survey hasbeen conducted by the Forestry Department on the number of trees that will have to be removed,which have been numbered and marked by GAIL and the Forestry Department. A total of 10,000trees will be removed from the pipeline ROW. None of the trees to be cut have diameters biggerthan 0.3 m . During actual construction, the number of trees removed is expected to be lower thanthat counted in the study, as the field engineers will be under instructions to minimize tree cutting.A number of trees on the margins of the road ROW will be spared, but for purposes of the EIAstudy they were included.

30. Under the compensatory reforestation rules of MOEF, GAIL will plant two trees forevery tree cut. The reforestation program will be carried out by the Forestry Department, whichhas expertise concerning and control over degraded forest land. GAIL is currently working out withthe Forestry Department procedures and methods to identify the planted trees and their survival

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rate. In addition, GAIL intends to develop 20-50 m green areas around the compressor, dispatch,and take-off stations in coordination with the LPG manufacturer, shippers, and distributors.

c. Human Environment

31. Villagers living along the pipeline route will be given jobs during the laying of theproposed pipeline subject to job availability and the villager's possession of the required skills andqualifications. GAIL will require the contractors to obtain certification from the farmers that therestoration work has been done satisfactorily. The villagers will be paid for lost income from thecrop affected by the pipelaying operation. The payment will be higher, as it does not consider theexpenditure required to produce the crop such as the cost of fertilizer, seeds, irrigation water,labor, and insecticide.

32. Basic facilities such as temporary housing, water supply, and sanitary facilities willbe arranged for the nonlocal work force. Medical facilities will be provided for them. Heavymachinery and equipment used for construction of the pipeline will be moved only along theROW. The machinery should be removed from the farms as soon as its use is completed. Anywaste or surplus material will be promptly removed from the field, and should not be buried belowthe soil. Transport of materials such as the pipeline will be scheduled to minimize an increase inthe existing traffic. GAIL will ensure that the contractors implement their instructions properly whilelaying the pipeline by incorporating appropriate conditions in the tender documents.

2. Operational Phase

a. Risk Analysis

33. Risk analysis for the most credible accidents has been carried out, and it wasfound that the impact area would be confined to less than 200 m from the pipeline. The distancesfrom the pipeline at different sections wherein the LPG concentration is high (low flame level)enough to ignite. If LPG is released from a pressurized pipeline, a substantial fraction of it flashesto vapor almost instantaneously. This rapid evaporation entrains much of the remaining liquid intothe air as fine droplets. Consequently, a release from a pressurized containment is assumed toconvert immediately and totally to the vapor phase, commonly called the aerosol cloud. Aconsiderable amount of air mixes with the LPG vapor during evaporation, depending on theprecise conditions of release, and the cloud will travel under the influence of wind and gravity. Asthe cloud travels it is further diluted. The flammable cloud formed by the escaping LPG vapor isdenser than air and generally forms a thin layer on the ground. This cloud flows into depressionsand trenches and can travel considerable distances. Even low wind speed in the area can movethe cloud downwind and gradually dilutes it. Three major types of combustion have beenrecognized. The first type is called the jet flame. A jet flame has a very limited impact area,normally within the plant boundary. Its main impact is weakening of surrounding structures, whichmay cause ruptures and further release of LPG. The second type is known as pool fire, characterized by a long and smoky flame. The wind may blow the flame towards the ground,causing secondary fires. The radiation intensity may be very high around the flame, but it dropsrapidly such that at distances of 3-5 times the diameter of the flame the radiation intensity istolerable to firefighters. Damage due to pool flames is more intensive than that caused by jetflames, but is limited to the immediate vicinity of the take-off or dispatch station. The third flametype is the cloud vapor flame, which may sustain propagating fires when ignited. In certain cases

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the flame may spread rapidly through the cloud from the point of ignition. Radiation intensity couldbe high, and if the flame travels fast enough, overpressure or blast effects will be created that cancause damage at considerable distances from the source of release. Most of the severe accidentsin LPG installations have been caused by unconfined vapor cloud explosion. If released LPG isunignited, it causes very little damage aside from possible asphyxiation at very high concentrationin the immediate vicinity of release.

34. The pipeline design, construction and operation will be carried out as per nationaland international standards. An additional safety factor will be provided at sensitive locations byincreasing the depth of cover to at least 2 m. This will reduce the risk by 25 percent. The othersafety measures are provision of sectionalizing valves every 12 km for areas with houses within200 m from the pipeline, and every 24 km in other areas; a leak detection system; SCADA; and acathodic protection system. In addition, the entire pipeline will be patrolled regularly.

35. To meet emergencies, proper warning systems for identifying hazardous situationswill be developed. Access roads and evacuation plans will be prepared and tested. Arrangementswill also be made to make available adequate firefighting resources. An effective and speedycommunication system will also be developed to augment resources during an emergency. In theevent of an emergency, the civil administration will be informed by GAIL. Considering the poormedical facilities available in the villages along the pipeline, some people such as teachers orrepresentatives of village organizations will be trained to administer first aid in case of anemergency.

36. The existing tanker operation at Kandla will be affected to the extent that there willbe changes in operational zones and shorter trips for the transportation of LPG. GAIL will take upthe issue with the LPG distributors of the additional tankers required from the bottling plants to theusers with the increased demand. GAIL will also discuss with the LPG distributors the supply ofLPG to villages that provide employment to displaced tankers.

37. For efficient and satisfactory functioning of the pipeline system, from both thesafety and economic points of view, the pipeline will be protected against corrosion and otherpotential dangers. It will be cathodically protected by an impressed current system as apermanent facility.

38. Descaling of the pipeline will be carried out regularly as per Oil Industry SafetyDirectorate (OISD) norms. The records of quantity and quality of pig residue collected afterdescaling will be examined in order to monitor the condition of the pipeline. The pipeline will beinspected at the time of commissioning and thereafter at regular intervals for corrosion/dents/pitsby means of pigging.

b. Physical Environment

39. The transport of LPG in a pipeline requires lower fuel per ton per kilometer thantransportation by road. When LPG is transported by truck, energy is used to move the truck body,pressurized tank, and fuel. Energy is also consumed when the empty truck returns to the dispatchstation. In fact, the weight of the truck and pressurized tank is almost twice the weight of the LPG. Large amounts of energy are also wasted when the truck queues in a traffic jam and throughroad friction. In pipeline, energy is utilized exclusively to move the LPG. The compressors and

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pumps used in the pipeline have higher energy utilization efficiency than trucks. The pipeline willresult in reduced emissions on major highways from LPG hauling. The compressors and pumpswill be driven by gas or electricity depending on the available energy source. The reduction in fuelconsumption is estimated at 185,000 tons per year of diesel fuel, and a reduction of 369 tons peryear of particulate emissions, 10,340 tons per year of NOx emissions, 3,694 tons per year of SO2

emissions and 1,034 tons per year of partly or unburned HCs is expected.

40. In the service area, LPG will displace kerosene and solid fuel. LPG has a highercombustion efficiency than kerosene and other liquid or solid fuels. With LPG, the concentrationof unburned or partly burned HCs, some of which are known carcinogens will be reduced. The by-products of LPG combustion are primarily carbon dioxide, water and a little SO2 from themercaptan. Aside from high combustion efficiency, due to its almost complete combustion, LPGstoves have higher heat transfer efficiency than other stoves.

41. The compressors and pumps will generate noise in the range of 90-100 dBA, evenwith silencers attached. The noise level will be reduced by soundproofing the compressor andpump buildings, and by planting trees. Outside a well-insulated building the noise level will drop tothe 70-80 dBA range. Operating personnel will be provided with ear protection devices. Thedispatch and take-off stations will be located in industrial areas within the premises of LPGmanufacturers, importers or distributors. As per safety regulations, all structures containing LPGwill be built at least 100 m from the boundary line. The noise is expected to go down to 50-60 dBAoutside the perimeter, which is well within the acceptable noise standard for an industrial zone inIndia.

42. A SCADA system will be used to ensure protection of pipeline integrity. A leakdetection system will be installed to quickly detect any leakage in the pipeline. These operationswill be monitored and supervised by master control stations at suitable locations. Remotelyoperated sectionalizing valves will be provided on both sides of major water bodies. The systemwill be designed so as to automatically close the valves, if necessary.

43. The ROW will be maintained and inspected regularly to ensure clear visibility andeasy access along it to valve locations and other pipeline facilities. Road and highway crossingswill be inspected once per quarter following OISD norms. The casing pipeline annulus will be keptfree of water. Submerged crossing locations will be inspected for erosion, prior to and after themonsoon, and topographic changes, if any, will be recorded for remedial action.

44. All pipeline markers/kilometer posts and other signs/specific indication marks willbe maintained according to OISD norms. In addition, Pearson surveys and continuous potentialsurveys will be carried out regularly. Those measurements, with the soil samples within the ROW,will determine the variations in soil resistivity for ensuring the adequacy of the cathodic protectionsystem.

45. From time to time GAIL may have to excavate sections of pipe for inspection orreplacement of valves or markers. Heavy equipment will be utilized along the ROW. This maycause crop damage if the section is within an agricultural area. Mitigation measures similar tothose discussed in para. 27 will be enforced.

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c. Biological Environment

46. Once the pipeline has been laid, the land can be used for cultivation. However,planting of large trees whose root systems may interfere with the pipeline will be prohibited.

d. Human Environment

47. GAIL will patrol the pipeline by air as well as by foot. Monthly patrolling will be doneby air, and quarterly patrolling by foot. The frequency of patrols in sensitive areas will be increaseddepending on the need. GAIL will train and hire about 50 local villagers for foot patrolling. Asmentioned earlier, LPG as a gaseous fuel is almost completely oxidized during combustion, unlikekerosene and other liquid or solid fuels. This results in better indoor air quality, reducing the risk ofcancer on the part of the consumer. The project will also reduce the risk of vehicular accidentswhich could damage surrounding areas including the tanker, other motor vehicles, houses, andbuildings.

e. Abandonment

48. Once a section of an LPG line has been found unfit for use, it is decommissionedto render the pipeline or sections of the pipeline free from fire hazard. The residual LPG isremoved by running a scrapper and batch pig with water and then nitrogen and finally air as theslug driving force. The displaced LPG will be collected in LPG tankers with suitable hoseconnection from the scrapper receiver to the tanker. LPG liquid hold-up in the pipework at thedispatch, receipt, and booster stations will be flared and burned with the help of mobile flares. Thepipeline will be made free from HCs by purging with nitrogen after depressurization on release ofliquid LPG, thereby, rendering the pipeline safe from fire hazard.

49. The recovery of the pipeline will depend largely on the economic conditionsprevailing at the time of decommissioning. Currently, the recovery of pipelines is economicallyviable. If pipe are dug up, the main environmental impact is the compensation and restoration ofthe affected land similar to what was described in para. 27. Another possibility is the use of thepipeline for transport of noncritical commodities like irrigation water.

E. Alternatives

50. In February 1995, GAIL carried out an optimization study for transport of LPG tothe western and northern regions by rail, road, and pipeline. The study recommended pipelinetransportation of LPG as the most economical mode. The advantages of the pipeline are (i) lesserdirect contact with the populace, thereby reducing hazardous impact during an accident as wellas providing better overall security; (ii) lower traffic congestion of the highways/railways, thusfacilitating the transport of other materials requiring that infrastructure; (iii) uninterrupted supply ofLPG ensured as compared with the otherwise intermittant and discrete supplies resulting fromtraffic congestion and non-availability/shortage of road/rail tankers and other infrastructure; (iv) theunit cost of transportation of LPG by pipeline being the lowest among various modes oftransportation (e.g., rail/road); (v) reduction in LPG delivered cost; and (vi) more efficient utilizationof energy, resulting in lower pollution load. The energy requirement for the pipeline is 35 kilocalorie/ton-kilometer (kcal/ton-km), while for trucking it is 430 kcal/ton-km, although the costdifference is not as apparent because of the very high subsidy currently in place for diesel fuel.

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51. The pipeline route for the selection criteria were based on (i) proximity to existingpipelines operated by GAIL to facilitate mobilization of resources during an emergency; (ii)minimal number of houses or people affected; (iii) geologic stability of the area; and (iv) proximityto LPG producers, import storage facilities, and bottling plants. The routes selected were primarilysalt pans, deserts, and agricultural lands. In passing through agricultural lands, the preferredpipeline route follows the ROW for irrigation canal maintenance.

F. Cost-Benefit Analyses

52. The economic analysis of the Project is based on a comparison of theeconomics of transporting LPG from domestic refineries and ports in the western region tobottling plants in the northern region through the proposed pipeline (the “with project” scenario)with the alternative of continuing to use the existing means of transporting LPG, namely acombination of road and rail transport (the “without project” scenario).

53. At present, over 80 percent of LPG is transported by road with the balance beingmoved by rail. Road transport is carried out by privately owned haulers operating under three-year contracts with the oil distribution companies. The cost of road transport per ton-km for LPGmoved from refinery or port to bottling plant works out to Rs2.50. The remaining 20 percent ofLPG is transported by railway. The cost of rail freight varies in line with the Indian Railwaystelescoping tariff but is estimated to average Rs1.9 per ton-km of LPG hauled, exclusive of thecost of the specialized tank wagons, which are owned by the oil distribution companies. Thetotal cost is therefore higher. Because of capacity constraints on the railway system within thewestern transport corridor, the current volume of LPG moved by rail is regarded as themaximum that can be transported by this mode unless there is a major expansion of railcapacity within the corridor. In the absence of the pipeline, therefore, road transport wouldhave to be used to move LPG from the refineries/ports to distribution points in the northernregion. Accordingly, the “without project” case can be defined as being a situation in which theprojected throughput of the LPG pipeline is transported entirely by road. By comparing theeconomic costs incurred by this means of transport with the economic costs of transporting theprojected throughput by pipeline, the economic benefits of the project can be determined fromthe difference in transport costs in the “with project” and “without project” cases.

54. The economic costs of transport by pipeline and road have been estimated onthe basis of financial costs, with appropriate adjustments made to reflect the true resource(economic) costs of the different components. Similar adjustments have been made to theestimated capital costs of the project, in financial terms, in order to express them in economicterms. These adjustment include the elimination of the effects of taxes, duties, and subsidiesand the use of standard conversion factors as appropriate.

55. On the basis of a comparison of economic costs and benefits over a 25-yeareconomic life after opening, the proposed pipeline shows an economic internal rate of return(EIRR) of 23.9 percent if both Phase I and Phase II are undertaken, or 22.9 percent if onlyPhase I is undertaken.

56. The results of a range of sensitivity tests show that the project remainseconomically viable with an EIRR 16.7 percent even under the most adverse scenario

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considered, namely capital costs increasing by 20 percent and benefits being reduced by 20percent.

57. The project is expected to generate additional economic benefits over and abovethe direct transport cost savings. Transporting a given volume of LPG through the pipelinerequires the use of substantially less HC fuel than would transporting the same volume by road.Accordingly, the volume of noxious emissions, such as SO2 , NOx, CO, and suspendedparticulate matter, from burning of HC fuels will be less in the “with project” case than in the“without project” case. On the basis of available estimates of diesel fuel consumption in roadtransport and the diesel fuel requirements for operating the pipeline, it appears that the HC fuelusage with the pipeline will be around 10 percent of the level that would be required to transportthe same volume of LPG by road. Accordingly, noxious emissions with the pipeline can beexpected to be only around 10 percent of those that would occur if road transport were used.

58. In addition, the transportation of LPG by pipeline will improve safety on the roadsalong which road tankers travel at present and will reduce the possibility of a serious accidentinvolving LPG spillage.

59. The benefits of reduced noxious emissions and improved safety are not easilyquantifiable. Inclusion of these benefits in the calculation of the EIRR would increase it. Hence,the estimated EIRR may be considered as a lower bound of the actual EIRR of the proposedLPG pipeline project.

G. Institutional Requirements and Environmental Monitoring Program

60. GAIL has an Environment and Safety Unit headed by a Senior Manager andassisted by qualified personnel with backgrounds in environment, safety, and firefighting. Theenvironment and safety unit reports directly to the General Manager for Operation andMaintenance. The functions of the unit are to train personnel in firefighting, safety and fire drills,fire prevention, and regular checking of safety devices. The unit prepares annual reports formanagement on the environmental and safety concerns for all GAIL installations, specificallypipelines, industrial plants, and transport facilities. The unit also coordinates compliance of thefacilities with the state pollution control boards of Gujarat, Rajasthan, Haryana, and Uttar Pradesh. Periodically, reports on environmental monitoring around the pipeline facilities such as boosterstations are submitted to MOEF and the state pollution control boards depending on theconditions imposed in the environmental clearance. Once a year, the environment and safety unitwill collate and submit to the Bank the monitoring results; copies of environmental and safetylicenses, clearances, and permits; and highlights of any event of concern to the safe andenvironmentally sound management of the facilities. If within the year the project has been citedfor violation of any environmental or safety regulation by any of the state pollution control boards,MOEF, or other relevant Government authorities, the report of the environment and safety unit willinclude a certification for the Government authorities that the defect has been corrected or anacceptable plan has been submitted and will be implemented.

61. The conditions of the pipeline will be monitored automatically by a SCADA unit,which will give an indication on the rate of corrosion or break in the protective coating. This is anadvance warning to prepare corrective action works. The difference in mass balance between theLPG supplied and delivered will also be calculated daily to determine losses in the system. In

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addition to the SCADA, a monthly aerial survey will be carried out to detect any unusual conditionsin the pipeline route that might not be detected on the ground. Regular foot patrolling will becarried out four times a year and more frequently in sensitive areas.

62. In the dispatch, takeoff, and pumping stations, the air quality will be measuredonce every six months. The air quality samples will be analyzed for SO2, CO, HCs, and NOx.Noise will be measured outside the buildings' housing the compressors and pumps as well as atthe boundary of the installation. Noise will be measured at noon and at midnight once a week forthe first six months after project commissioning and on a monthly basis thereafter.

H. Public Involvement

63. The socioeconomic impact assessment carried out in connection with the project,specifically informed the affected communities the details of the project, such that in the course ofthe field work, informed responses were received. The socioeconomic impact assessment alsorevealed that affected communities already possessed a significant degree of accurateinformation about the project from other sources such as past pipelaying operations in the area,the geodetic survey, the geologic survey, and the initial survey to establish alternative pipelineroutes. The methodology of the socioeconomic impact assessment was first to talk to thecommunity leaders to gather basic data about the affected communities and then to conduct face-to-face surveys with community members. In the face-to-face survey, teams provided communitymembers with specific information about the project such that the respondents could react undera common and accurate information base. Using this methodology, the survey team consideredthat community members understood the project and were reacting as informed parties. Publicmeetings were not possible due to the sparse population along the pipeline and the long distancesbetween communities. Within the 200 m distance from the pipeline identified by the risk analysisas critical areas, there are fewer than 3,086 families or an average of 2.6 families per kilometer.

I. Conclusion

64. The overall long-term impact of project will be beneficial in (i) alleviating the LPGsupply shortage in the northern region; (ii) reducing pollution and improving air quality along thetransport corridors; and (iii) improving the quality of life of the population, in terms of reduction ofindoor air pollution, who are presently using inferior fuels. The pipeline is a more economical,safer, and environment-friendly mode of transportation for LPG than other modes. The othershort-term beneficial impact comprises temporary employment for the local population duringconstruction of the pipeline. The major adverse impact of the pipeline will be a result of activitiesduring its construction. However, the impact will be temporary, localized, and reversible, and canbe compensated for.