New 1000-km pipeline from Koyali to Rewari

Vol 6, PW 10 (17 Jul 02) Midstream & Downstream

Shastri Bhawan has submitted a proposal that could rescue Petronet India's Vadinar-Kandla product pipeline from threatened irrelevance following IOC's March decision to convert the Kandla-Bhatinda product pipeline into a crude pipeline.

It centres on construction of a new Rs2,000cr ($416m) 1,000-km product pipeline from Kandla to Rewari through Sidhpur. PETROWATCH learns of a 12th June meeting in Shastri Bhawan between joint secretary refineries Shivraj Singh and representatives of Petronet India, IOC, HPCL and BPCL, during which Singh produced a "strong" protest letter from Petronet against the IOC decision.

He also had three possible rescue proposals of which only one was considered appropriate: a Koyali to Rewari pipeline carrying products from Vadinar that could link into IOC's Koyali-Sidhpur pipeline and then travel to Rewari, carrying products from HPCL, BPCL and Reliance. Will lenders be interested Petronet-India is unsure.

Shastri Bhawan is convinced lenders will finance the new pipeline if oil companies sign take-or-pay agreements and it has asked Petronet-India to begin the process of getting take-or-pay commitments for the new Kandla-Rewari pipeline from oil companies. Inexplicably, neither Reliance nor Essar were invited to the meeting even though both are stakeholders in the Vadinar-Kandla venture.

That apart, Shivraj Singh's proposal appeared like a life jacket to Petronet. "There seems to be some hope for the Vadinar-Kandla pipeline," adds a source.

"At last we have got the ministry interested in our plight."