The Hindu Business Line : KRL mooring facility to be ready by May 2007

The Rs 623-crore single point mooring (SPM) project of Kochi Refineries Ltd (KRL) is likely to be commissioned before the scheduled May 2007, if the current pace of progress is sustained.

While most of the contracts have already been awarded, the remaining three major contracts would be awarded early next month, Mr B.K. Menon, Managing Director, KRL, told Business Line on Thursday.

He said that the contract for setting up the SPM off the Puthuvypeen coast near here had been awarded to a US company, Blue Water, while the bids for the 19.4-km submarine pipe laying work in the sea are in the final stages of evaluation and would be awarded early next month. Five foreign companies are in the fray, he said.

Other pending bids are for laying pipeline through the backwaters and tank fabrication work. KRL procures the required materials for the entire project and supplies them to the contractors. This conventional method would help the company save around Rs 40 crore, he said. Currently, the company receives crude oil from Bombay High as well as from other countries at the Crude Oil Terminal (COT) of Cochin Port Trust by deploying limited capacity tankers up to 70,000 tonnes due to draft limitation at Cochin channel. This results in higher transportation costs to KRL, especially when securing crude from far-off countries like Nigeria. By using Very Large Crude Carriers (VLCC), the cost of crude can be substantially reduced. To become globally competitive, KRL should make use of this freight advantage by setting up Crude Oil Receipt Facilities (CRF) on its own.

The SPM at 19.4 km off Puthuvypeen lighthouse in the Arabian Sea for handling VLCCs of 300,000 tonnes capacity would be in place much before KRL's refining capacity expansion — from the present 7.5 million tonne to 9.5 million tonne per annum. The Rs 2,000-crore project (now revised to Rs 2,500 crore) is scheduled to be completed by September 2009, Mr E. Nandakumar, General Manager (Projects), said.

He said that the laying of the 48-inch-diameter submarine pipeline to carry crude oil from the SPM to the Shore Tank Farm (STF) would cost around Rs 100 crore. As it is a specialised job, the bidders are all from foreign countries, he said.

The STF would have a storage capacity of 240,000 kl crude oil in three tanks of 79-metre diameter, and work has already commenced with 15 per cent of the piling over, he said. The steel plate fabrication is estimated to cost around Rs 30 crore. Contract for laying the 10-km onshore pipeline of 30-inch diameter between the STF and KRL, excluding that of the backwater crossing of about 4 km, has been awarded to the Hyderabad-based IVRCL.

Bids for the backwater section is under evaluation and would be awarded next month, he said.

The approved cost of the project is around Rs 623 crore (December 2002 estimation). The project was initially envisaged for implementation on a LSTK (lump sum turn key) basis.

As the cost based on the lowest bids was very much in excess of the estimated cost, it was decided to implement the project on the conventional (engineering and procurement by owner and erection by contractor) basis.

INTEC Engineering, Malaysia, along with its associate, FEDO, are the project management consultants.

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