HPCL wants EIL to do FEED for Chhara LNG terminal

Vol 17, PW 14 (27 Feb 14) Midstream & Downstream

Hindustan Petroleum wants to appoint fellow state-owned Engineers India (EIL) without tender to prepare the Front End Engineering and Design (FEED) for its proposed 5m t/y Chhara LNG terminal in Gujarat.

Industry sources say HPCL has rejected other civil engineers like Tractebel, Foster Wheeler and Technip. HPCL wants to avoid delays so has asked EIL to provide a detailed breakdown of how many man-hours are needed to prepare the FEED, before it makes a decision.

An EIL source says it will take around six months to complete the FEED. But he adds EIL does not feel "comfortable" working with HPCL.

EIL has recently won a series of high value contracts abroad and feels contracts with slow moving Indian state firms will absorb too much of its resources. EIL previously worked with HPCL managing the construction of its 9m t/y Bhatinda refinery and is being considered for the EPC and management (EPCM) contract for HPCL's Barmer refinery in Rajasthan.

HPCL began the process of getting environmental clearances for Chhara last month (January), requesting terms of reference from the environment ministry to allow it to proceed with a public hearing. The process should take about six months.

HPCL formed a joint venture with Mumbai-based Shapoorji Pallonji on July 31, 2013 to develop the Chhara terminal, to be located within the boundaries of Simar Port near Pipavav.