Financial Daily from THE HINDU group of publications
Tuesday, May 09, 2006
Financial Daily from THE HINDU group of publications Tuesday, May 09, 2006 |
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Corporate
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Alliances & Joint Ventures Industry & Economy - Petroleum HPCL-Total joint venture begins work on cavern unit Richa Mishra
Cavern facilities Underground cavern storages are not only safe, but beyond a certain size are cheaper than above ground storage facilities. They occupy very little surface area and are environment friendly.
New Delhi , May 8 The joint venture company of Hindustan Petroleum Corporation Ltd (HPCL) and Total of France has commenced work on the project for storage of liquefied petroleum gas (LPG) at Visakhapatnam. South Asia LPG Company Pvt Ltd, the 50:50 joint venture formed in 1999, has been involved in development of the project, which is estimated to cost Rs 333 crore and is likely to be completed by the middle of 2007. The cavern, because of its large storage capacity, is expected to help import of LPG in large parcels thereby reducing the freight costs. The joint venture company with Total was set up following Government's suggestion that the state-owned oil marketing companies involved in marketing of LPG should play a supportive role by forming joint ventures for infrastructure development of additional import facilities, tankages, pipelines, as well as bottling plants and promote parallel marketing of LPG.
Safest storage medium
According to industry sources, underground cavern storages are considered to be the safest means of storing hydrocarbons. When contacted by Business Line, Mr M.B. Lal, Chairman and Managing Director of HPCL, said, "Such facilities are not only safe, but beyond a certain size are cheaper than above ground storage facilities. They also occupy very little surface area and are environment friendly." The cavern facility at Visakhapatnam is billed to be the largest LPG storage terminal in the country, he added. Regarding the financing of the project, sources said the debt was being obtained from a consortium of banks led by State Bank of India.
The EPC contractor for the project is Larsen and Toubro, assisted by international agencies for certain specialised activities.
Structural design
The cavern is being constructed through two vertical shafts — operation shaft and the access shaft. The crown of the main storage cavern is located almost 166 metres below the surface and has an effective storage volume of 1.2-lakh cubic metres, permitting a storage of 60,000 tonnes of LPG. The project will be integrated with the existing import facilities of HPCL and will help the LPG market in the region, Mr Lal said. A LPG pipeline from Visakhapatnam to Hyderabad has been constructed by GAIL (India) and this could be used to transport LPG from the cavern up to Hyderabad. The design for the cavern has been done by Geostock, a global major, which has been involved in the design of such caverns for the last 40 years.
More Stories on : Alliances & Joint Ventures | Petroleum | Hindustan Petroleum Corporation Ltd
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