IndianOil completes Paradip SPM, pipeline project
New Delhi   28-Dec-2008
The New Year is going to bring cheer to IndianOil. Crude oil is expected to start flowing in the Rs 1,178-crore single-point mooring facility at Paradip in Orissa and the 330-km-long pipeline up to Haldia in West Bengal beginning December 28, according to sources. The project will replace a large part of the POL (petroleum, oil and lubricants) traffic through Haldia Port from 2009. “The project will be commissioned in December 2008,” Mr. P.K. Chakraborti, Director (Pipeline) of IndianOil told Business Line. The project will reduce the crude transportation cost of Haldia and Barauni (Bihar) refineries, which together process approximately one fourth of IndianOil’s total refining capacity of 60 million tonne a year, leading to a positive impact on the bottomline. According to some initial estimate, Haldia refinery (7.5 million tonne) alone will save no less than Rs 450 crore a year once crude is sourced from Paradip. Overall the refining margin in the two refineries will improve by $1-1.5 a barrel. Both the refineries (connected through Haldia-Barauni pipeline are importing approximately 12 million tonne crude through Haldia Port, which cannot accommodate large crude tankers due to lack of draft, leading to spiralling of costs.) <b>Pivotal role</b> The project may also help to expand the company’s refining operations in Guwahati and Bongaigaon (BRPL) in the crude deficient Assam by utilising pipeline network. It sets the stage for implementing IndianOil’s proposed refinery-cum-petrochemicals complex at Paradip, according to sources. “This was perhaps one of the most challenging projects we have ever commissioned,” said a source close to the development admitting that final cost may exceed the estimated Rs 1,178 crore. Originally scheduled to be commissioned in March 2006, the project, especially the SPM part, faced challenges from the beginning, due to technical and geographical reasons, leading to replacement of at least two project contractors. In 2006 the original SPM contractor Iranian Offshore Engineering and Construction Company was replaced by Oil and Gas Engineering Systems of Australia. Global Offshore and Leighton India completed the project.