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P. Manoj

THE Ministry of Shipping has proposed a slew of initiatives required to implement a national policy on setting up Single Buoy Mooring (SBM) facilities at major ports to discharge oil cargo.

The draft policy was discussed at a meeting called by the Union Shipping Secretary, Mr D. T. Joseph, on September 24. Some of the major port trusts are understood to have expressed reservations on a few of the features mentioned in the draft. These include fixing wharfage on the basis of uniform and transparent norms subject to approval from the Tariff Authority for Major Ports (TAMP).

"This will ensure that oil companies will be protected from discriminative or opportunistic pricing in major ports. Ports can enter into a long-term agreement with users for having stable charges," says the draft policy.

The major ports are also resisting the proposal to levy charges only for the services provided to the SBM operator.

Further, they have opposed the plan to lease out waterfront in the major ports on a long-term lease basis to SBM users in a bid to grant them more freedom.

The draft also pre-empts attempts made by some major port trusts to enlarge their limits to bring any proposed SBM within their ambit. "The major ports should not extend their limits just to bring any proposed SBM within its purview without the consent of the user," it says.

Besides, the decision to locate SBM within a major or a minor port to cater to the requirements of new refineries will be left to the users.

"However, existing refineries using a major port for import of crude oil may consider setting up SBMs within those major ports," the draft prescribes.

The Ministry of Petroleum and Natural Gas has been vested with the task of identifying the preferable intake points for crude oil keeping in view the existing locations of refineries for selecting possible locations for setting up of SBMs during the next 20 years.

Distance from the shore and the refinery, availability of logistics support and investment required would be the guiding criteria for identifying locations for installing the SBMs.

The draft policy has proposed joint ventures between major port trusts and the user industry for the setting up of SBMs. "While formation of special purpose vehicles can be considered for this purpose, the build-operate-transfer (BOT) format may be preferred," the draft policy has suggested.

The draft policy is of the view that the major ports should develop expertise for SBM operations including maintenance of submarine pipelines and SBMs. The major ports shall provide for dry-docking of SBMs, for repairs and re-conditioning in identified ports. The major ports may consider acquisition of new SBMs with their own investments taking into account the market requirements.

The draft policy also seeks to exempt SBM projects from the mandatory Coastal Regulatory Zone (CRZ) clearances from a national importance perspective. "Since it is essential to tap the most suitable location for SBMs, having advantages in terms of proximity to the shore, availability of deeper draft, wind velocity, lesser frequency of storm, current, tranquillity, availability of space for turnaround and facility for pegging, such projects should be exempted from CRZ clearances," it has recommended.

Moreover, in order to ensure maximum utilisation of the capacity and the highly capital-intensive infrastructure, it is proposed to operate the existing and prospective SBM facilities on a multi-user basis. Given the perennial draft restrictions facing major ports, setting up of SBMs in the mid-sea would provide deeper draft for large tankers to come and tie-up with the SBMs for discharging the crude cargo without calling directly at the berths, which is a much more costlier proposition and time consuming for the oil importers.

"This will result in faster evacuation of crude cargo at a lesser landed cost per tonne mainly due to shipping oil on large tankers to achieve economies of scale," a shipping industry official said.

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