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IndianOil to invest ~20,000 crore in pipeline network

Business Standard:  April 10, 2017

New Delhi: State-run Indian Oil Corporation is planning to invest at least Rs 20,000 crore to add a 25-million-tonne (mt) pipeline. The project will cover 20 projects in the next four years.

“We are looking to increase our pipeline capacity by 25 mt — including crude oil, liquefied petroleum gas and other petroleum products — from the current 93.7 mt level. This includes investments of Rs 20,000 crore,” said Anish Aggarwal, director (pipelines), IndianOil. 

The company’s road map comprises India’s longest LPG pipeline from the Kandla coast in Gujarat to Gorakhpur in eastern Uttar Pradesh. The pipeline covering cities Ahmedabad, Ujjain, Bhopal, Kanpur, Allahabad, Varanasi and Lucknow will carry 3.75 mt a year and cover 2,650 km.

IndianOil has already submitted an expression of interest in this regard to the Petroleum and Natural Gas Regulatory Board (PNGRB), which is expected to wind up a bidding process by the end of May. The company is set to invest about Rs 7,000 crore for this project. 

This comes at a time when the company is also in talks to extend GAIL India’s Urjja Ganga pipeline from Gorakhpur to Amlekhganj in a strategic move. The Rs 12,940-crore Urja Ganga project will pass through five states — Uttar Pradesh, Bihar, Jharkhand, West Bengal and Odisha — covering 2,619 km in 49 districts. 

The first phase of a natural gas pipeline of 1,200 km from Ennore to Tuticorin with an investment of Rs 4,500 crore is also likely to come up by June 2018. 

The other major projects for which the company has initiated tendering process are the Paradip-Hyderabad, Paradip-Haldia and Baroni-Motihari pipelines. “For all these 20 projects, pre-project activities are going on. Talks are also going on with Nepal to form a joint venture with the National Oil Company of Nepal to lay these pipelines,” Aggarwal added. 

IOC is also in talks to extend its LPG pipeline project from Raxaul in Bihar to Amlekhgunj in Nepal at a capacity of 1.3 million tonnes per annum at an investment of Rs 275 crore covering about 41 km.

IndianOil and NOC are also tying up to expand Prime Minister Narendra Modi’s pet project Pradhan Mantri Ujjwala Yojana (PMUY) to Nepal. The scheme was launched in May 2016, to provide LPG connections to 50 million below-poverty-line families in three years. The government is providing a support of Rs 1,600 a connection. Under the scheme, India has so far given 20.4 million connections.

IN THE PIPELINE

  • IndianOil’s pipeline capacity: 93.7 MMT
  • Capacity to be added in next four years: 25 MMT
  • Expected investment: Rs 20,000 crore
  • Biggest project: Gujarat to Gorakhpur LPG pipeline with Rs 7,000 crore investment
  • Other major projects for which tendering process are initiated: Paradip-Hyderabad, Paradip-Haldia and Baroni-Motihari pipelines

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.