IOC plans LPG pipeline grid
New Delhi   01-Jan-2012

Seeking to consolidate its core business and make it more efficient, state-owned IndianOil (IOC) has decided to establish a countrywide LPG pipeline grid to reduce the supply chain cost of transporting LPG.

“We are in the process of preparing a project as to where all we can lay the pipeline. This is another thing that aimed at reducing our supply chain cost that is generally moved by rail and road. This is what we have done recently through a study. We have laid a pipeline from Tikri Kalan to Bhatinda but we are now in the process of building a pipeline from Kandla to Loni. There is already a pipeline of GAIL in place and discussions are on whether we could use their facility or have to build another pipeline for transportation of LPG,'' IndianOil Chairman R. S. Butola told The Hindu.

The effort is to lay pipelines to various work centres where IOC is transporting LPG. The aim is that wherever IOC has high consumption, plan should be drawn up to lay pipeline to transport LPG. Basically, the emphasis on this is to reduce the supply chain and distribution cost. Similarly, the corporation is planning to transport aviation turbine fuel (ATF).

“We are keen on making a major foray into the petrochemical business as it holds the promise of fetching good margins. We are also investing in speciality chemicals and related products,” he added. IndianOil and its subsidiaries account for a 47 per cent share in the petroleum products market, 34 per cent in refining capacity and 67 per cent in downstream sector pipelines capacity.

It supplies Indane cooking gas to over 62.4 million households through a network of 5,456 distributors.

Mr. Butola said IOC had also drawn up a major strategy to enter the gas business in a big way by building up capability as well as capacity. “We are in the process of setting up a 5 million tonne LNG terminal at Ennore in Tamil Nadu at a total cost of Rs.4,500 crore. We are going to set up receiving terminals.

At present, the feed is on and once feed is completed in a few months from now, we will be placing orders for construction. This will bring efficiency in our system because today we are using other fuels and gas is cheaper.

"We are also captive consumers of gas and could consider supplies to various users,” he said.

Mr. Butola said IOC had joined hands with Nuclear Power Corporation of India Limited (NPCIL) for making a foray into nuclear power. IOC has formed a joint venture with NPCIL for executing a 1,000 MW nuclear power project in Rajasthan. Discussions were now on with NPCIL for other new projects in this area. “We have hired some experts who are at present working with NPCIL under this joint venture and we hope to go further in this partnership,” he said.