No Reliance bid for Central India Pipeline

Vol 6, PW 14 (11 Sep 02) Midstream & Downstream

RELIANCE CAUSED a stir on 4th September when it declined to submit a bid to BOOT (Build Own Operate and Transfer) Petronet-India's cross country Central India Pipeline.

Neither did Larsen & Toubro, but nobody was disappointed about that. The only bid received was from the Sun Securities-OAO Stroytransgaz consortium.

"We were quite surprised that Reliance did not bid," reveals a Petronet-India source. Both Reliance and the Sun Securities consortium were expected to bid.

By contrast L&T is expected to join up with any successful bidder to secure the pipeline laying contract. Petronet has begun evaluating the Sun Securities bid, but pessimists among industry sources said the pipeline might be a non-starter given Reliance's absence.

Especially since the other favourite IOC did not even submit an Expression of Interest. Reliance's Jamnagar refinery and IOC's Koyali refinery will be the only two users of the Petronet-India pipeline.

We are told that the Sun Securities consortium bid is "most likely" conditional on the user oil companies signing either a take-or-pay agreement or providing 'comfort letters' for product quantities and tariff. "We will award the bid to them only if it is acceptable to us," reveals Petronet.

"They have been asking for take-or-pay commitments or at least comfort letters." Also worrying is the possibility that Reliance might goahead with its own parallel central India pipeline, choking off the Petronet pipeline. Most believe Reliance has alreadycompleted pre-project activities and is awaiting the 'official death' of the Petronet India pipeline.