The Hindu Business Line : Revised cost estimate of mooring project — Kochi Refineries' consultants to submit report next month

THE consultants appointed by Kochi Refineries Ltd (KRL), Intek Asia-Pacific, Malaysia, for preparing a revised cost estimate for its Rs 780-crore crude oil receipt facilities project, would submit their report next month and the company's board is to approve it in its next meeting in July.

The cost escalation to the extent of 40 per cent over the approved cost of Rs 780 crore under the originally planned turnkey package has compelled the company to go for the conventional method and that has necessitated preparation of a revised cost estimate, Mr B.K. Menon, Managing Director, KRL, told Business Line on Tuesday. Added to this, the cost of steel, a major component of the project, has also gone up substantially. Investment approval of the board would be sought in July, he said.

According to Mr M.A. Mohammed Ali, Director (Refineries), 48-inch submarine pipeline has to be laid for a distance of 20-km from the single buoy mooring (SBM) location to the shore tank farm and from there 30-inch pipeline covering six km to connect the existing pipeline would also have to be laid. Already enquiry has been floated, as the pipelines are long delivery items.

He said that the base pipes would cost around Rs 60 crore, while the laying cost etc might come to about Rs 50 crore. The cost of SBM alone is expected to cost around Rs 75 crore, he said. There are three or four suppliers of this item and they are all foreign.

He said the work on this project such as placing of the SBM in the sea and laying of submarine pipelines, could be taken up only in fair weather conditions, which in Kerala coast would be from November/ December to March/April.

Under the conventional method, work would be awarded to contractors in small packages while the materials would be supplied by KRL. The company expects to complete the project within the original approved cost of Rs 780 crore as against the price of Rs 900 crore quoted under turnkey package. The facility at Puthuvypeen Island near here is scheduled to become operational by May 2007, he said.

Setting up of the crude oil receipt facilities consisting of SBM, a shore tank farm and connected pipelines was mooted to reduce the cost of crude oil transport and handling as part of the Rs 3,000-crore expansion programme of KRL to be completed by 2010. Such facilities have become inevitable as the company is in the process of expanding its capacity from the 7.5 million tonnes per annum to 13.5 mtpa. Engineers India Ltd had prepared the detailed feasibility report, which was approved by the KRL board.

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