The Hindu Business Line : KRL begins work on single buoy mooring

KOCHI Refineries Ltd, which has got the clearance from the BPCL Board last month for implementing the Single Buoy Mooring project under conventional method, has placed orders worth Rs 80 crore for supply of major pipes with two Gujarat-based companies.

While the price bid for setting up the Floating Buoy, a major component of the project, 19.4 km off Puthuvypeen lighthouse in the Arabian Sea for handling Very Large Crude Carriers (VLCC) of 300,000-tonne capacity from the short listed four foreign firms would be opened within a month, official sources told Business Line. They said that pre-bid discussions were already over and technical and commercial bid evaluation was in the final stages.

Civil works estimated at Rs 3 crore had started, they said.

The revised cost of the project is likely to be less than that of the approved cost of Rs 623 crore on Dec 2002 basis.

It was initially envisaged for implementation on a lump sum turnkey (LSTK) basis and global tenders were floated in mid 2004 for 2 packages accordingly.

As the cost based on the lowest bids was very much in excess of the estimation, it was decided to implement the project on a conventional (engineering and procurement by owner and erection by contractor) basis. Once completed, Kochi Refineries is expected to make net saving of Rs 70 crore, they said.

INTEC Engineering, Malaysia, along with its associate FACT Engineering and Design Organisation (FEDO), was appointed as the Project Management Consultant in March 2005. The SPM project has become inevitable to reduce the transportation cost of crude, especially at a time when the company is expanding its capacity from the present 7.5 million tonne per annum (MTPA) to 9.5 MTPA, they said.

AT present, Kochi Refineries is receiving the crude oil from Bombay High as well as from other countries at the crude oil terminal (COT) of Cochin Port by deploying limited capacity tankers up to 70,000 MT due to draft limitation at the channel.

This results in higher transportation costs to the company, especially when the crude is sourced from far off countries such as Nigeria. By making use of Very Large Crude Carriers (VLCC), the cost of crude can be substantially reduced and it is estimated that the company would make a saving of around Rs 200 crore on transportation cost.

"To become globally competitive, it is essential that it makes use of this freight advantage by setting up crude oil receipt facilities (CRF) on its own. The location of the facilities was thereafter agreed upon based on a mutually beneficial Memorandum of Understanding with the Cochin Port Trust", they said.

A shore tank farm (STF) is being set up at Puthuvypeen in 70 hectares taken on lease from Cochin Port Trust. The facilities envisaged at STF are 3 numbers of 79 M diameter crude oil tanks, booster pumps for pumping the crude oil from STF to the company, which is approximately 24 km away, effluent treatment plant, fire fighting facilities, rain water harvesting facilities, green belt etc., they added.

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