GAIL's Tatipaka-Kondapalli pipeline, which was built in 2001 to move dry natural gas to Lanco Power Plant, transported gas as also water and condensate coming from ONGC's wells. Water and condensate corroded the pipeline, leading to gas and condensate leaking to surface where a lighting of a stove led to a blast and subsequent fire on June 27.
An inquiry committee, headed by the ministry's Joint Secretary (Refineries) Rajesh Kumar Singh, in its report blamed "inadequate systems/approach" for the accident.
The agreement between producer ONGC and transporter GAIL does not provide for the quality of gas to be supplied as is the case in several marginal and isolated fields in Krishna Godavari and Caurvey basins as also Gujarat and North East.
Putting separators to strip gas of liquids before transportation may not be economically viable at all places due to small quantities of fuel being produced from these fields.
An audit by pipelines regulator PNGRB in August 2011 too did not make any observation in connection to composition of gas and associated issues.
The report said there was "no evidence of any efforts" by Nagpur-based Petroleum and Explosives Safety Organisation (PESO) to enforce putting up of Gas Dehydration Unit to drain out water and liquids.
The pipeline was also audited by OISD and there has been no observation on wet gas content.
The report said it was difficult to establish individual culpability.
Besides installation of dehydration facility for removal of water and condensate prior to feeding natural gas in the pipeline, it recommended through inspection of the pipelines and putting up of leak detection system.
Also, patrolling using modern gadgets should be carried out in the pipeline route.
It also recommended that "GAIL should complete an internal enquiry of managerial failures at different levels and fix responsibility for the lapses pointed out herein."      
"Comprehensive procedure shall be developed for repair of pipeline in case of leak," it said, adding GAIL must develop proper supervisory and control systems for maintaining the health of pipelines.
The state government on its part did not act on GAIL's representations for removal of encroachment along the pipeline route.
"GAIL has apparently flouted the declaration to the statutory authority as well as the declared design basis by not providing GDU at Tatipaka and Mori. Absence of GDU contributed to increasing the internal corrosion rate in the pipeline," the report said.
Wet gas contains free water, carbon dioxide and sulphur which induced internal corrosion in the pipeline. The panel said the explosion, followed by a major fire, was due to leakage of condensate and gas which was probably continuing from the night before the incident. The condensate formed vapour cloud with gas pockets, and triggered a major fire when a tea vendor lighted the stove.
A spark, possibly from a stove lit by a local, at 05:45 hours on June 27 led to condensate and cloud of gas catching fire with a loud explosion. The fire spread over a 50-metre radius, engulfing nearby dwelling units, houses and tea stalls, killing 22 people, including three women and three children, besides injuring 17 others.

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