Pressure grows against HPCL and BPCL pipelines

Vol 8, PW 20 (12 Jan 05) Midstream & Downstream

Indian Oil has stepped up its campaign to block Hindustan and Bharat Petroleum from building separate product pipelines to northern India.

On 9th December, IOCs pipeline director AM Uplenchwar wrote to the Petroleum Planning and Analysis Cell opposing HPCLs proposed Mundra to Delhi pipeline and the proposed extension of BPCLs Mumbai-Manmad-Indore pipeline to Delhi. Investment by HPCL in Mundra to Delhi as well as extension of Mumbai-Indore to Piyala by BPCL would be wasteful expenditure, writes Uplenchwar.

Instead, he wants HPCL and BPCL to source their product requirement from various tap-off points from IOCs already commissioned Koyali to Sanganer and Panipat to Rewari pipelines. These pipelines cover all the areas proposed by the Mundra to Delhi pipeline, he argues.

Uplenchwar claims that IOC has decided to double capacity of the Koyali to Sanganer pipeline from 3.4m t/y to 7.2m t/y. PSUs will be working at cross purposes, writes Uplenchwar.

Nobody gains by moving products uneconomically at demand centres that can be met by seeking assistance from other PSU refineries closer to the demand centres. Uplenchwar cites a study on Indias supply and demand scenario by 2011-12 to argue that BPCL and HPCL will be product surplus at their respective Mumbai refineries while IOC would be surplus at Koyali.

He says that despite this, the western region will emerge as deficit on an overall basis and that it makes more sense to carry out product swaps than waste resources by competing with each other. Uplenchwar writes: Koyali, Panipat and Mathura refineries (with the existing connected pipeline system) can meet demand requirements up to 2016-17 and serve the national interest as well.

He ends the three-page letter with a request that the oil ministry advise HPCL and BPCL to abandon their plans.

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