The Hindu Business Line : IndianOil in talks to take part in Turkey pipeline project

Indian Oil Ltd is negotiating with global crude oil trading lobby to firm up throughput commitment for its proposed participation in the Trans Anatolian Pipeline Project (TAPP) in Turkey promoted by ENI of Italy and Calik Energy of Turkey.

The $1.5-billion oil pipeline from Northern Black Sea city Samsun to the Mediterranean port city Ceyhan will ensure smooth transportation of 1.5 million barrels of crude, primarily from Kazakhstan, every day.

According to an agreement signed between IOC and ENI-Calik combine on November 2, the Indian oil major may be allowed to pick up stake in the project subject to firm throughput commitment.

While the throughput commitment would have a direct bearing on the quantum of equity stake, IOC had already expressed its intention of picking up a significant stake.

"We are currently negotiating with a number of traders to tie up firm supply requirements without any sort of equity strings attached," a company official said, adding that the entire process would take two to three months to be finalised.

Apart from IOC, Royal Dutch Shell has also entered into similar agreement with ENI-Calik combine.

It may be mentioned that IOC is also competing with Kazakh oil company, KazmunayGas, and Turkish Petrol Office for setting up a 15-million-tonne grassroot refinery at Ceyhan at an estimated cost of $6 billion.

While the refining project — if approved by the Energy Market Regulatory Authority of Turkey — would ensure partial end use of the crude transported through TAPP, IOC sources said that participation in the pipeline would not be feasible without firm supply tie-up with the traders.

"Though there is connectivity between the refinery and the pipeline projects, we are treating them separately," the official said.

"We are looking forward to picking up a substantial stake in the pipeline even if we are denied a chance to set up the refinery," he added.

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