Only BPCL interested in Reliance product pipeline

Vol 7, PW 10 (30 Jul 03) People & Policy

ONLY BHARAT Petroleum is likely to submit an 'Expression of Interest' for 25% capacity in one of Reliance's six planned cross-country common carrier petroleum product pipelines.

Reliance's six pipelines are the first of their kind following publication by the oil ministry of new guidelines on 26th May. Like all Reliance plans, this one is grand in scope.

When complete, the Reliance pipelines will travel 5,985-km and mark the company's maiden entry into this sector. Criticism of Reliances plan is forthright.

Hindustan Petroleum is the most scathing, particularly of the three Reliance pipelines planned for south India: Goa to Hyderabad, Chennai to Bangalore and Kakinada to Vijayawada. "These pipelines are a stupid idea, said an HPCL source.

They will be unviable unless there is appropriate infrastructure in the form of 'tap-off' points. There is no point in duplicating infrastructure.

Indian Oil, the biggest player, is equally unimpressed. All of our pipelines are under-utilised," reveals a top official.

"It does not make sense to share Reliances infrastructure. According to one source, the capacity offered by Reliance in some sectors is too low.

For instance, individual capacity will be less than 1m t/y in the 660-km Goa to Hyderabad pipeline, in the 540-km Chennai to Bangalore pipeline, in the 200-km Kakinada to Vijayawada pipeline and in the 375-km Haldia to Ranchi pipeline. A mere 0.8m or 0.9m t/y throughput in the southern routes is not lucrative enough, feels IOC.

Only the 1,580-km Jamnagar to Patiala pipeline and the 2,540-km Jamnagar to Kanpur pipeline will carry between 3.3m t/y and 5.6m t/y of petroleum products. IOC is present on these routes already," IOC tells us.

"We dont need Reliances pipeline to transport products to the north." Essar Oil is also uninterested and says it will set up its own pipeline infrastructure from its proposed refinery at Vadinar in Gujarat to the lucrative northern India market. BPCL is the only exception.

A source confirms it is interested in 25% of the Jamnagar to Kanpur pipeline. This route interests us," he said.

"If it matches our requirement of product supplies in central India, we may submit an EOI after studying its relevance."

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