The Hindu Business Line : IOC may commission Paradip-Haldia pipeline project by December

The pipeline — coupled with single point mooring (SPM) and storage facility at Paradip in Orissa — was originally scheduled for completion in March 2006.

Since the project would reduce the transportation cost of crude for both Haldia and Barauni refineries, IOC is expected to benefit in terms of a higher refining margin in both, beginning the fourth quarter of this fiscal.

Haldia and Barauni refineries currently refine over six million tonnes (47.4 million barrels) of crude oil each annually.

A project is underway to ramp up the capacity of Haldia refinery to 7.5 mt. Refining margins of both refineries are expected to increase by over $1 a barrel after the pipeline is commissioned.

Hurdles faced

The project ran into rough weather from its start, following a series of problems involving project design, environmental clearance, and last but not the least, differences with the Iranian contractor deployed to complete the SPM and the connecting 20 km offshore pipeline.

Finally, the 330-km sub-surface pipeline from Paradip to Haldia was completed in April-May this year but work was far from over at the SPM end.

Accordingly, IOC replaced the SPM project contractor — Iranian Offshore Engineering and Construction Company (IOEC) — by Oil and Gas Engineering Systems of Australia. IOEC was accused of inordinate delay in completion of the project.

Further delay

According to sources, though the company expected the new contractor to complete the remaining work by July-August 2007, work could not proceed owing to heavy monsoons in Orissa.

“We are now expecting to restart work in October and commission the project by December,” a senior IOC official told Business Line, denying any legal complications with regard to the change of contractor.

He was, however, silent on the impact on the project cost because of the delay.

“It was impossible to complete the project as per the original schedule. We are now striving to complete the remaining part of the project,” the official said.

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