State-run Indian Oil Corporation plans to use nearly half the capacity of the country’s longest liquefied petroleum gas (LPG) pipeline. The balance capacity of the proposed pipeline is to be used by the public sector corporations Hindustan Petroleum and Bharat Petroleum, and Reliance Industries.
Petroleum & Natural Gas Regulatory Board (PNGRB), the downstream regulator, has invited bids from interested parties by June 6 to lay a 2,650-km long LPG pipeline from Kandla in Gujarat to Gorakhpur in Uttar Pradesh, with additional feeder lines of Pipavav-Ahmedabad and Dahej-Koyali. The pipeline will have a capacity of 6 million metric tonnes per annum, including common carrier facility for any third party on open access basis. The main line will be about 2,000 km long. Indian Oil Corporation had written to the PNGRB about four months ago, saying it was interested in building such a pipeline between Gujarat and Uttar Pradesh to cater to the rising demand for cooking gas in the country. Following such expression of interests, the regulator has to hold consultations with all stakeholders. Based on their feedback, it has to firm up the specifications for the proposed pipeline and then open it to formal bids.
During the consultation, GAIL said the proposed pipeline would hurt the company’s underutilised LPG pipeline that partly runs on the same route, and therefore shouldn’t be built. During the consultation, the companies supporting the pipeline had to intimate PNGRB how much capacity each of them planned to use. IOC has committed to use 3 million metric tonnes of pipeline capacity while HPCL and BPCL have committed 1.8 million tonnes and 1.7 million tonnes respectively. RIL has committed 242,000 metric tonnes.
These companies will source some LPG from their respective refineries closer to the proposed route but plan to substantially import LPG for this pipeline. Ports at Kandla, Pipavav and Dahej will be the import points.
Those planning to bid must have a minimum net worth of Rs 1,855 crore and furnish a bid bond of Rs 15 crore. The bidders are allowed to deviate up to 5 per cent from the indicative route mentioned in the bid document for preparing the feasibility report.Read More…