Cairn losing patience with oil export pipeline

Vol 15, PW 23 (31 May 12) Midstream & Downstream

Talk about slow progress – Larsen & Toubro has taken nearly two years to lay a 6.5-km stretch of Cairn India’s under-construction 74-km crude oil export pipeline from Salaya to Bhogat in Gujarat.

This is about the same time it took Cairn to lay the main 610-km stretch of pipeline from Barmer in Rajasthan to Salaya in Jamnagar district! “We’ve given up!” says a Cairn India source. “This project is well behind schedule.

It was meant to be completed in May last year.” But Cairn doesn’t blame pipeline laying contractor L&T - hired in May 2010 - for the delay.

Like GAIL (see above) it blames land acquisition problems with local farmers who are demanding high compensation and are supported in their attacks on Cairn by Vikram Bhai Madam, Congress MP from Jamnagar and a powerful figure in Gujarat politics. “L&T’s crew and equipment is sitting idle,” adds Cairn.

“They cannot work from next month in any case as the monsoon begins. We hope to get RoU permission to lay the remaining stretch and finish work by next March (2013).

” Luckily for Cairn a Single Buoy Mooring (SBM) system off Bhogat on the Gujarat seacoast is ready; once the Salaya to Bhogat pipeline is commissioned, Cairn will use the SBM to load barges with crude to transport to Hindustan Petroleum’s 8.5m t/y Vizag refinery on the east coast or ONGC subsidiary Mangalore Refinery and Petrochemicals (MRPL) on the west coast. Cairn hopes to also export oil from Bhogat port, but needs government approval.

Jindal Saw is supplying pipe for the Salaya to Bhogat pipeline.

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