M A I N   N E W S

Petronet to lay Kandla-Bathinda line

Mumbai, August 11
In order to save its Rs 383 crore Vadinar-Kandla product pipeline in Gujarat from redundancy, Petronet India Ltd (PIL) has decided to construct a separate 1,443 km long petroleum product pipeline from Kandla to Bathinda, Punjab.

“We want the Vadinar-Kandla pipeline to be operative and are already in talks with oil companies like Indian Oil, Essar, Reliance for equity participation in proposed company for setting up parallel product pipeline,” PIL managing director K K Sinha told PTI here today.

The company is irked with Indian Oil Corporation’s (IOC) decision, announced last March, to convert the existing Kandla-Bathinda product pipeline into a crude carrier, thus leaving the fate of the operational Vadinar-Kandla into a limbo.

IOC’s Kandla-Bathinda pipeline is hooked to PIL’s Vadinar to Kandla pipeline as the latter was conceived with the sole intention to evacuate petroleum products from Essar Oil Ltd’s proposed nine million tonne refinery in Vadinar.

However, as the Essar refinery has shown no signs of commencement, PIL’s Vadinar-Kandla is currently carrying products from Reliance Industries Ltd’s Jamnagar refinery to IOC’s installation in Kandla, which are then carried upwards by the oil major’s pipeline to the deficit areas of northern India.

“We work on a common carrier principle and the ultimate aim of the cross-country pipeline is to fulfil the needs of the northern hinterland,” he said.

IOC’s decision to convert the existing pipeline to a crude carrier not only seemed to block the evacuation of Reliance’s products, but also led to an increased insistence from the lenders on a ‘take-or-pay’ contract to avoid the companies going back on their word, industry sources said.

The Vadinar-Kandla pipeline has completed first year of its operations and also Petronet India’s first completed project.

Ironically IOC played a role of management consultant to the project and also holds 26 per cent stake in Petronet VK Ltd, the company which has laid the pipeline.

Other stake holders in the company are Petronet India with 26 per cent, Reliance Industries 13 per cent, Essar 13 per cent, ILFS 5 per cent, State Bank of India 5 per cent, Gujarat Industrial Development Corporation Ltd 5 per cent, Kandla Port Trust 5 per cent and Canara Bank.

Petronet India’s Mangalore-Hasan-Bangalore, its venture down south, will be commissioned by year-end. PTI