Work begins to extend Cairn crude pipeline to Bhogat

Vol 13, PW 4 (30 Jul 09) People & Policy

Cairn’s simmering dispute with Rajasthan state authorities over VAT doesn’t appear to be affecting work on the ground, particularly with the pipeline to evacuate the crude from Barmer to the Gujarat coast.

PETROWATCH learns Cairn has begun work to extend the 610-km Barmer to Salaya crude pipeline by another 100-km up to Bhogat. In April last year, Cairn hired L&T to lay a â€کheated’ and â€کinsulated’ pipeline from its Barmer oilfield to Salaya on the Gujarat coast.

But we hear Cairn is now evaluating bids to extend the pipeline to Bhogat, which is some 100-km from Salaya, and also on the coast. Jindal Saw Pipes, PSL and Welspun are among the pipe manufacturers that submitted technical and price bids to Cairn on July 6 for the Bhogat extension.

A pre-bid meeting was held on June 10. “We expect Cairn to award the contract by end-August,â€‌ said a source with a company that bid.

“Cairn wants the pipe with insulation coating.â€‌ Our source adds that Jindal Saw Pipes and PSL are the only companies with insulation coating facilities at their plants.

“I think Welspun submitted its bid for pipe without coating.â€‌ If true, that leaves just PSL and Jindal as the two serious bidders, with Jindal the clear favourite because in January last year it won the $200m contract to supply pipe for the entire length of the Barmer to Salaya pipeline.

“We already have equipment on site,â€‌ adds Jindal. But PSL remains optimistic, saying Cairn might give it a chance if it offers a â€کbetter price’ than Jindal.

On the ground, work is progressing well on the main pipeline stretch. “L&T has completed almost 80% to 90% of the work,â€‌ we hear.

“They have completed the Gujarat section of the pipeline.â€‌ Three months ago Cairn tested a small portion of the pipeline.

“Cairn tested a 25-km to 30-km stretch,â€‌ says a source. “The insulation worked fine.

â€‌ After insulation coating the 24-inch diameter pipeline increases in size to a 32-inch diameter pipeline.

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