Southern States - Tamil Nadu-Chennai   

All set for IOC petroproduct pipeline

By N. Ravi Kumar

CHENNAI OCT. 14. The Indian Oil Corporation has begun the groundwork for the Chennai-Tiruchi-Madurai petroproduct pipeline, which it will start laying by early next year.

The company, which decided to go ahead with the project on its own by July-end — a consortium led by Petronet India was originally set to implement the network — is confident of commissioning the facility by February 2005.

Conceived over eight years ago, many stakeholders in the oil industry gave up on the project, which promised not only a competitive edge for the IOC but also a safe, speedy and cost-effective mode of transporting the products from the refinery of the Chennai Petroleum Corporation to markets in the southern belts of the State.

The recent IOC board decision giving the green signal has put to rest speculation about the project — it would be the first such facility of the oil major in the south.

The IOC decision was necessitated by Petronet's insistence on a `take or pay' clause in the agreement. It wanted the IOC to provide a committed offtake or anyway pay up the transportation cost.

The course and the cost of the pipeline have, however, been altered in the process. While the route of the pipeline, running through 525 km remains the same, a 155-km branch-off from Aasanur up to Sankagiri has been included.

``It has been done to take our own products (the IOC now retails the products of the Kochi Refineries, which is a group company of the Bharat Petroleum Corporation) to markets in the western parts of the State,'' a senior IOC official told The Hindu.

Reduction in cost

The project cost has come down from about Rs. 538 crores to Rs. 381.21 crores, which includes about Rs. 18 crores on creating marketing infrastructure, ``because of the reduction in the size of the pipeline and owing to the inherent advantages of the IOC implementing the project on its own. We need not spend on the design engineering and consultancy, which would be provided in-house.''

The pipeline, to be laid one metre below the ground, will carry petrol, diesel and kerosene.

``If demand arises, it can carry naphtha also,'' says the official. Initially the pipeline — its diameter 14 inch from Chennai to Aasanur, 12.75 inch from Aasanur to Sankagiri and 10 inch from Aasanur to Madurai — will have a capacity to move 1.80 million tonnes of the products annually.

The proposed provision of an additional pumping facility at Aasanur would enhance the capacity to 2.32 million tonnes.

The groundwork, including the tendering process and finalisation of the deal for use of the land through which the branch from Aasanur will traverse, is under way.

While the Ministry of Environment and Forests has cleared the CTM pipeline, environment clearance for the branch-off network is required.

Listing the comparative advantages of moving petroleum products by the pipeline, the official says, ``The scope for pilferage, adulteration and loss in evaporation during transit is little. It would be the safest and environment-friendly way of moving petroleum products.''

The pipeline would enable the IOC to be prepared for the emerging competition, as it will improve its margin and save on the transportation by road and rail.

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