The Hindu Business Line : ONGC-Cairn pipeline project: Engineers India to do feasibility study

Feasibility study
Engineers India Ltd is doing the techno-feasibility study.
The technical aspect of the pipeline takes priority, as the crude from Rajasthan requires a proper heating arrangement.

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New Delhi Feb. 24 Putting an end to all apprehensions and speculations on transportation of crude from Cairn India Ltd's Rajasthan fields, Oil and Natural Gas Corporation has roped in Engineers India Ltd (EIL) to undertake a technical feasibility study for the proposed pipeline. ONGC is a 30 per cent partner with Cairn India in the fields.

On its part, Cairn India has also appointed an international consultant to undertake a feasibility study to transport crude oil from Barmer, Rajasthan, to a nearby port city. The proposed pipeline is expected to be one of the issues to be discussed when Sir Bill Gammell, Chief Executive, Cairn Energy PLC, begins his visit to India in the next few days.

"First the methodology to execute the project needs to be worked out. EIL is doing the techno-feasibility study. Based on the techno-feasibility study and once the route of the pipeline is worked out then one can look into the implementation aspect," a senior ONGC executive told Business Line. The feasibility study on the technical aspects of the pipeline takes priority, as the crude from Rajasthan requires a proper heating arrangement, he said.

The crude from Rajasthan is heavy with high wax content and requires specialised pipelines to transport it from Barmer. The feasibility study would also bring out the issue of cost recovery and the size of pipeline that is required.

The executive was also of the view that since both the companies are partners in the project, ONGC and Cairn may not be required to ink any understanding for the purpose. He also felt that the pipeline cost would be part of the field development plan (FDP) for the Rajasthan fields as this would be recoverable.

Elaborating, the executive said that like the cost for developing Mangala, Bhagyam and Aishwariya fields, the pipeline investment would also be shared between Cairn and ONGC in a 70:30 ratio, which is the current equity structure of the two companies in the fields.

Crude from Rajasthan will begin flowing from 2009.

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