The Hindu : Business : Cabinet clears OVL's Sudan pipeline project

Online edition of India's National Newspaper
Friday, Jun 25, 2004

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Business

Cabinet clears OVL's Sudan pipeline project

By Our Special Correspondent

NEW DELHI, JUNE 24. The Cabinet Committee on Economic Affairs today cleared a $200 million investment by ONGC Videsh Limited for laying an oil pipeline in Sudan in exchange for supplies of crude oil. The agreement between OVL, the overseas subsidiary of the Oil and Natural Gas Corporation (ONGC), and the Sudan Government is expected to be signed tomorrow.

The contract for laying the 741 km-long petroleum product pipeline and upgrading of the Khartoum refinery has been given to OVL on a nomination basis by the Sudan Government. According to the Union Petroleum Minister, Mani Shankar Aiyar, the decision today "marks a significant breakthrough in economic relations with Sudan".

For OVL, this will be its first engineering and construction project in Sudan. The pipeline system is designed for a throughput of 8.26 lakh tonnes annually in Phase-I and 2.54 million tonnes annually in Phase-II. The project is to scheduled to be completed in 16 months from the date of signing of the pipeline contract agreement with Sudan, matching with the completion schedule of the Khartoum refinery upgradation project.

With the pipeline project, an ONGC release says the overall investment of OVL in Sudan will be of the order of $800 million during 2004-05.

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