IOC plans LPG pipelines to bulk industrial users

Vol 9, PW 25 (06 Apr 06) Midstream & Downstream

Bulk consumers of LPG in northern and western India could soon be receiving supplies by pipeline direct from refineries controlled by Indian Oil.

PETROWATCH learns IOCs pipeline division is working closely with its marketing division on a plan to link several of its refineries by pipeline to key small to medium-sized customers in the ceramics, glass manufacturing and other similar industries. Under consideration is a plan that would initially see three refineries linked to industrial LPG consumers: the 13.7m-t/y Koyali and 8m-t/y Mathura refineries in Gujarat and the 6m-t/y Panipat refinery in Punjab.

Morbi in Gujarat is the ceramics hub of India and consumes most of the LPG produced at Koyali. Last year, Koyali produced 317,500 tonnes of LPG; Panipat produced 444,000 tonnes LPG; and Mathura produced 2.3m tonnes LPG.

At a later stage, IOC wants to link its 9m-t/y Chennai Petroleum and smaller 1m-t/y Narimanam refineries in southern India by pipeline to local bulk LPG consumers. IOC has carved out a study group from its marketing division and given it a six-month deadline to submit a report to the board.

Once the study is ready we wont need more than two and half years to implement the proposal, a senior IOC official confirms. Only industrial consumers will benefit from this.

Our plan does not involve domestic customers. IOC is already a clear leader in the sale of 15-kg LPG cylinders used by domestic consumers as cooking fuel and doesnt want to cut into its own market with a competing pipeline.

IOCs marketing division was selected to carry out the study because it has the most in-depth knowledge within the corporation about past, present and future demand for LPG among its customers and in India at large. In the last fiscal IOC supplied a total of 4.76m tonnes of LPG to its bulk consumers by road or rail.

Delivering by road or rail can cause delays because of strikes or accidents, adds IOC. Delivery by pipeline will be much more efficient.