Land starved IOC and HPCL ask IOT for help

Vol 18, PW 2 (11 Sep 14) Midstream & Downstream
     

In India any company who can help you acquire land for your EPC project is a company you definitely want to hire.

Which is why IndianOil and Hindustan Petroleum are set to award a contract next month (October) to IOT Infrastructure & Energy to supervise work to set up a new Rs225cr ($37m) Petroleum-Oil-Lubricant (POL) Terminal at Borkhedi, a small town of 30,000 people 30-km from Nagpur in Maharashtra. “Land acquisition takes a long time,” says an HPCL manager.

“IOT already has 17 acres of land available in Borkhedi which we can use.” In total, the project needs 72 acres of land.

IOC has 21 acres available itself. Another benefit is that IOT is a joint venture between IOC and Germany’s Oiltanking.

An IOC officer says working with IOT will reduce project time and costs. “Further land acquisition will take six months,” he says.

“And the project will be implemented within 24 months of statutory approvals.” IOT is already developing a similar terminal at Raipur in Chhattisgarh for IOC and Bharat Petroleum.

IOC and HPCL are working on the basis that they can recover costs within 25 years from the date of commercial operations, but have yet to decide whether to adopt a BOOT (Build, Own, Operate, Transfer) or a BOO (Build, Own, Operate) model. Tanks at the site will be designed to provide 15 days storage capacity for the two firms.