Petronet-India protests Reliance pipeline plans

Vol 7, PW 11 (13 Aug 03) Midstream & Downstream

Curious are the ways in which India's state-owned oil industry companies function.

On 11th July, state-sponsored pipeline company Petronet Central India wrote to Shastri Bhawan complaining that the ambitious 2,540-km Jamnagar-Kanpur pipeline proposed by Reliance overlaps with its own Central India Pipeline project which was approved in 1999 as a common carrier petroleum products pipeline. Ten days after sending the letter, the board of Petronet India - Petronet Central India's parent - decided to abandon the project as Reliance and Indian Oil, two of the four promoters, were no longer interested.

No one at Petronet-India, however, thought to inform Shastri Bhawan of the board's decision. "We have not heard of the Petronet-India board decision," confirms a ministry source.

As a result, the 11th July Petronet Central India letter complaining about Reliance remains alive in the Shastri Bhawan files. In that letter, Petronet Central India tells its ministry masters that the route of the Reliance pipeline, "coincides with the route and tap off points of its own proposed Central India Pipeline at Kota, Gwalior, Indore and Nagpur and at the injection point at Jamnagar".

Shastri Bhawan is told that, "significant progress has been made in carrying out pre-project activities" at a cost of Rs8.6cr. These activities, says Petronet Central India, include the detailed route survey, cadastral survey, soil investigation and soil stratification.

Petronet Central India's 11th July letter wants Shastri Bhawan to invite expressions of interest to share capacity in its Central India Pipeline project in the same manner as was done for Reliance. How does Shastri Bhawan respond It has not yet replied to the Petronet Central India letter.

"We will certainly publish the Petronet Central India project," says an oil ministry source. "We are now processing their application and have sent them some queries."