IOC says no to 'take-or-pay' for Vadinar-Kandla

Vol 5, PW 14 (29 Aug 01) News in Brief

Indian Oil is refusing to sign a take-or-pay agreement with Petronet VK, operator of the Vadinar-Kandla pipeline.

The 100-km pipeline began operation in May 2000 for products from Reliance's 27m t/y refinery at Jamnagar to IOC's Kandla-Bhatinda pipeline. "IOC originally agreed to sign take-or-pay," learns PETROWATCH.

"But now they say they will not sign because they have no control over the Reliance refinery." Petronet VK needs project financing but discussions with ICICI broke down because of IOC's refusal on 'take-or-pay'. Now talks are on with Infrastructure Development Finance Corporation for a Rs200cr ($4.3m) loan.