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Amit Mitra

Tanker discharging crude oil at Kochi port... Public sector oil companies are drawing up plans to set up Single Buoy Moorings to achieve economies of scale.

THERE is likely to be a spurt in the number of Single Buoy Moorings (SBMs) at Indian major ports in the coming years, with the Shipping Ministry planning to lay special emphasis on this sector by coming out with a national policy on SBMs to attract both the oil companies and the private sector to invest in such facilities. The Shipping Ministry has held two rounds of discussions with senior representatives of the shipping industry and the oil companies on the subject and has recently come out with a draft national policy. The public sector oil companies are in the process of drawing up plans to set up SBMs at the major ports to meet the increasing requirement of crude and POL handling facilities at the ports. While IOC has recently concluded an MOU with Mundra port for installing an SBM, HPCL is planning for a similar facility at Vizag port.

According to a report prepared by the Indian School of Petroleum, the demand for petroleum products is likely to rise from an estimated 111.1 million tonnes in the current fiscal to 123.3 by 2006-07, while the refining capacity is projected to swell from 135 million tonnes to 220 million tonnes during the same period.

The indigenous crude oil production is expected to go up from 30.46 million tonnes in the current fiscal to 31.5 million tonnes by 2006-07.Thus, the report points out, the imported crude oil requirement is likely to rise from the present level of 85 million tonnes per annum to 147 million tonnes by 2006-07.

The reason for encouraging fresh investments in the SBM sector is primarily the fact that the facility can be used to achieve economies of scale in logistics cost, as it does not impose any restrictions on the size of the ship. A SBM is a complete, self-contained offshore oil terminal facility, which provides the means for both mooring and transferring of liquid cargo to and from large vessels, including VLCCs (Very Large Crude Carriers).

Essentially, SBMs consist of a platform for the oil handling system, which is incorporated within a floating buoy unit, with the mooring line from the bow of the vessel attached to the platform. All SBMs moor a vessel to a single point and allow the vessels to move about that point, in response to the changing sea environment dynamics like current and wind.

The share of liquid bulk cargoes was about 35 per cent of the total cargoes that moved through Indian major ports and 48 per cent of the throughput handled by the minor ports last fiscal.

At present, there are about 39 liquid bulk berths in the Indian major ports, two bar jetties at Haldia and two SBMs at Vadinar under the Kandla Port Trust. Apart from these, Reliance Petro-chemicals Ltd has set up two captive SBMs at Jamnagar.

The Shipping Ministry has pointed out that the per tonne landed cost for liquid cargo is inversely proportionate to the size of the vessel and hence more SBMs should be set up as the size of ships used for transporting crude oil is increasing due to freight advantage.

The need for more SBMs is being particularly felt because of draft limitations at the major ports. The drafts at the ports range from 14 metres at New Mangalore to 16 metres at Chennai. "This draft limitation is stifling the requirement of higher turning circles for vessels and safer handling of VLCCs, which require deep drafts in the region of 25-30 metres. One of the suggestions made in the draft policy on SBMs is that investors should be given the option to locate the facility either within the port limits or outside. At present, SBMs should necessarily be set up within port limits, which make the operation of these facilities expensive, as the operator would have to pay port dues. As part of the policy initiatives of the shipping ministry, the Petroleum and Natural gas ministry has been asked to identify the "preferable intake points for crude oil keeping in view the existing locations of refineries for identifying possible locations for installation of SBMs during the next 20 years."

Another suggestion in the draft policy is that major ports may explore possibilities of entering into a joint venture with the user industry for setting up of SBMs. Further, the major ports have been asked to consider acquisition of new SBMs with their internal financial resources, keeping market requirements in view. Also, ports may consider allowing leasing out of the waterfront area on a long-term lease basis to SBM users.

The Ministry has also suggested that wharfage should be calculated with "uniform and transparent norms", subject to the approval of the Tariff Authority for Major Ports (TAMP). This would ensure that the oil companies are protected from "discriminative or opportunistic pricing in major ports". On the issue of construction of SBMs in India, one of the suggestions was that Indian shipyards should gear up to built the facility, even for exports. At present, Mazagon Shipyard and L&T manufacture SBMs.

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