The Hindu Business Line : ONGC in talks with GSPL for crude evacuation plan

OIL and Natural Gas Corporation (ONGC) is in talks with Gujarat State Petronet Ltd (GSPL) for a pipeline linkage between its fields in North Gujarat and the Dahej port in South Gujarat.

The ONGC plan is to evacuate its production of crude from the fields of Gujarat — Mehasana, Ahmedabad and Ankleshwar — aggregating some 5.5 tpa (tonnes per annum) to 6 million tpa from Dahej by sea to its subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL).

At present, this crude is being supplied to the Gujarat Refinery of Indian Oil Corporation (IOC) in Vadodara. Of late, there has been some discord between the two entities on the quality of crude. The flip side is that if the ONGC plans were to fructify, IOC may need to identify alternative sources of crude by early 2006.

Mr Subir Raha, Chairman and Managing Director, ONGC, who was here on Thursday, said that ONGC would be looking at optimising its profits. "Redirecting the crude currently given to IOC to MRPL is one option that we are considering. This would allow us to enhance our profits," he said, but refused to confirm what the deadline for such an action plan would be.

However, it is understood that ONGC is looking at GSPL for a turnkey arrangement whereby the Gujarat company would leverage on its project management skills in erecting a pipeline grid from scratch, including the Right of Use (RoU).

The Rs 250-crore project would also include the setting up of a storage facility and a jetty at Dahej over a period of 18 months. The outsourcing contract is likely to be frozen in the coming couple of weeks.

The 80-km Navagam (Ahmedabad)-Vadodara pipeline is already in existence for carrying the crude from ONGC's North Gujarat fields to the Gujarat Refinery, though some augmentation would be required to ensure smooth flow of crude further on. GSPL would be required to lay a new 100-km pipeline connecting Vadodara and Dahej as also another linkage between Ankleshwar and Dahej.

ONGC has already announced that it intends to scale up the rated capacity of theMRPL facility from 9.69 million tpa to 12.69 million tpa over the next two years at an investment of around Rs 2,000 crore. With the Dahej linkage already in place by that time, ONGC would have wider options than the crude from Bombay High and Sudan that it currently has at its disposal.