The Hindu Business Line : Strike at BPCL-Kochi Refinery mooring project to cost Rs 150 cr

The entire construction work at the estimated Rs 800-crore Single Point Mooring project of the BPCL-Kochi Refinery (KRL) here has come to a grinding halt for the past couple of weeks following a strike by the workers.

The loss incurred from the strike is estimated at Rs 100-150 crore.

Given this situation, the project's commissioning scheduled for May this year might be extended beyond the targeted time, Mr E. Nandakumar, General Manager (Projects), told Business Line on Monday.

If the project is not completed by May, then the southwest monsoon would set in by early June and that might delay the commissioning as the work could be commenced only after the rains. In fact, the workers have resorted to stoppage of the work at a time when 70 per cent of physical completion has been achieved, he said.

Surprisingly, the strike is not for any wage increase, but because of the disputes between various trade unions on the ratio of workers employed in the loading and unloading section. In fact, about Rs 3 crore has been paid towards these charges alone, which are comparatively very high when compared to other States.

No Govt intervention

The work has been stopped for over a fortnight, and yet the Government has not intervened to resolve the crisis. The incident sends out wrong signals to investors who are under the impression of late that the stigma of labour militancy in the State is on the wane, he pointed out.

Meanwhile, the buoy would be ready at the manufacturing facility of the Dutch firm Blue Water in Indonesia and despatched by January 15. While materials for laying the submarine pipeline from the buoy to the coast are also in place, he said.

To cut transport costs

The SPM project has become inevitable for the refineries to reduce the cost on transportation of crude, especially at a time when the KRL is expanding its capacity from 7.5 million tonne per annum (mtpa) to 9.5 mtpa, he said.

At present, KRL is receiving the crude oil from Bombay High and from other countries at the Crude Oil Terminal (COT) of the Cochin Port Trust by deploying limited capacity tankers up to 70,000 mt due to draft limitation at Kochi channel. This results in higher transportation costs to the refinery, 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 KRL 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," he said.

The proposed project consists of the following main facilities: Single Point Mooring (SPM) 19.4 km off Puthuvypeen lighthouse in the Arabian Sea for handling VLCC of 300,000 tonne capacity, which is; a submarine pipeline of 48 inch diameter to carry crude oil from SPM to Shore Tank Farm (STF); STF for storage of 240,000 KL crude oil at Puthuvypeen Coast, before it is pumped to KRL refinery at Ambalamugal; 30 inch Onshore Pipeline between the STF and KRL pipeline corridor over a length of about 10 km, including backwater crossing of about 4 km.

The SPM, he said, is a floating buoy anchored at a depth of 30 metres for mooring large tankers and for receiving crude through floating hoses, under buoy hoses and the 48-inch submarine pipeline to the shore tanks.

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