IndianOil plans Rs 4,000-cr investment in pipelines to cut transport cost
New Delhi   19-Sep-2009
IndianOil is planning investments of around Rs 4,000 crores in pipelines in the next couple of years to reduce the costs it incurs in transporting products by rail and road. This pipeline plan is in addition to the projects worth Rs 4,000 crores already under implementation. According Mr. K. K. Jha, Director (Pipelines), depending on the output, pipeline transportation costs 14-70 per cent of the railway freight Enhancing the pipeline network will, therefore, contribute significantly to IndianOil’s net profit. While a part of the total investment envisaged may be used in de-bottlenecking the existing Malaya Matura crude pipeline (Rs 1,800 crores), the lifeline of the three refineries (Mathura, Panipat and Koyali) in northern and western India, and accommodate Cairn crude, the company is considering major investments in creating an LPG pipeline network across the country. <b>LPG Pipeline</b> Having already set up a 275-km LPG pipeline from Panipat to Jalandhar in Punjab, the company is now considering crisscrossing the country with LPG pipelines. High on the radar is a 700-km Paradip-Haldia-Durgapur pipeline connecting the bottling plants at Balasore in Orissa and Budge Budge, Kalyani and Durgapur in Bengal. Apart from carrying LPG produced at Paradip and Haldia refineries, the pipeline will also carry imported LPG from the Haldia port Ballpark estimation suggests that the pipeline may cost nearly Rs 1,400-1,500 crores. We are considering a slew of LPG pipeline proposals in the south and west connecting various refineries and import terminals. Apart from saving costs, it would ensure smooth availability of LPG at our bottling plants located closer to the customer, Mr. told Business Line. Another priority area is creating pipeline network to carry naphtha from Koyali and Mathura refineries to the petrochemicals facility at Panipat Part of the project is already under implementation. Having already initiated work for setting up a SPM (single-point-mooring) and the offshore pipelines capable to import up to 17 million tones crude for the Paradip refinery, IndianOil is also planning a product pipeline from Paradip to Ranchi in Jharkhand connecting New Sambalpur (Orissa) and Raipur (Chhattisgarh) at an estimated cost of Rs 1,100 crores.