The Hindu Business Line : IndianOil Paradip-Haldia crude pipeline may go on stream in Jan

Kolkata, Dec 5 After prolonged delay, IndianOil may be just weeks away from operationlising its Paradip-Haldia crude pipeline. According to sources, the pipeline is expected to transport crude at lower cost to Haldia and Barauni refineries beginning January.

Though the 330-km long pipeline was ready early this year, work on Single Point Mooring (SPM) facility at Paradip was stalled owing to issues ranging from technical problems to replacement of the contractor.

While sources denied any impact on the project cost – Rs 1,178 crore combining both pipeline and the SPM – so far, the delay in project implementation had refrained the company from gaining some extra margin at the refineries. The payback period of the pipeline, implemented as a separate project, may also be impacted.

“Work is going on in full swing on completing the SPM and its allied services. We are now hopeful that oil will start flowing through the pipeline beginning January,” a company source said.

It may be mentioned that IOC originally set a target date of completion of the entire project (pipeline and SPM) by March 2006. The ground realities, however, proved it was too steep a target to achieve.

Eco clearances

While the pipeline project was delayed due to the time-consuming process of securing environmental clearances for passing through the forests of Orissa, the estuaries of a number of rivers, including the Mahanadi on the coasts, posed technological challenges. The pipeline was finally in place in April-May this year.

The SPM project on the other hand faced rough weather from the beginning primarily due to differences between IOC and the original project contractor ‘Iranian Offshore Engineering and Construction Company (IOEC)’, leading to delays in project commissioning. The heavy rains and choppy sea conditions on the East coast added to the woes.

Finally, IOC replaced IOEC by bringing in Oil and Gas Engineering Systems of Australia earlier this year to complete the project. Construction resumed in October.