The Hindu Business Line : IOC to up product movement through pipelines by 30%

Transporting crude and products through pipelines gives IOC a lot of flexibility; it is less costly than movement by rail or road, more environment-friendly and is the best option if the refinery is land-locked.

P. K. CHAKRABORTI, DIRECTOR (PIPELINE), IOC

Richa Mishra

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As the backbone of Indian Oil Corporation Ltd’s (IOC) refining and marketing operations, its 9,300-km pipeline network registered the highest ever operational throughput of 57.12 million tonnes (MT) last fiscal.

Compared to the previous year, the product pipelines achieved a 10.45 per cent increase in throughput while the crude oil pipelines registered a 10.54 per cent growth. In an interview with Business Line, Mr P. K. Chakraborti, Director (Pipeline), IOC, speaks about the advantages of transportation of crude oil and petroleum products through pipelines and the company’s plans for increasing the pipeline network.

Excerpts from the interview:

IOC prefers transporting crude oil and petroleum products through its pipeline network rather than opting for rail and road tankers. What are the advantages of transportation through pipelines?

The company is looking at increasing transportation through pipelines by 30-33 per cent. The capacity of the pipeline network is 61.74 million tonnes per annum (MTPA). IOC is ferrying 35.85 MTPA of crude oil and 21.27 MTPA petroleum products through pipelines.

The product pipeline capacity is 27 MTPA. Of the total capacity (9,300 km) 5,300 km is product pipeline and 4,000 km is crude oil pipeline. The crude pipeline network is feeding crude oil to the refineries — from offshore to the terminal.

Transportation through pipeline also gives IOC a lot of flexibility. The product pipelines are for ferrying white oil — petrol, diesel, kerosene and ATF. These products are transported through a single pipeline.

How cost effective is this mode of transportation. Are there different specifications for transporting crude oil and petroleum products?

Pipeline returns are linked to alternative modes of transport — that is, 75 per cent of the notional rail freight.

If rail freight is Rs 100 per tonne, then transportation through pipeline would work out to be Rs 75 per tonne. Economically, transportation through a pipeline network is more viable.

The company transports more crude than its line capacity. IOC is involved from concept to commissioning of the pipeline. Besides, ferrying products through pipelines is also more environment-friendly.

The main difference between transportation through pipeline compared with rail and road is that, in the latter modes, the cargo remains stationery while in case of pipeline it is the other way round.

This also reduces additional fuel costs used for transporting the product from one place to another, thus, serving the purpose of delivering the product at least cost.

What about the security prospects?

Transportation of produce is more difficult than crude. Movement of product through pipeline is the best option if the refinery is land-locked (IOC’s refineries are land-locked). The company adopts stringent security measures.

There are pilferages happening. IOC has 66 installations to monitor the pipelines. These installations are manned.

And for cross-country pipelines, the company has adopted a system of physical patrolling. In the last five-six years, there has been a decline in pilferage.

What measures are taken to ensure smooth flow of crude oil and petroleum products?

The crude pipeline network is different from the petroleum product pipelines. The product pipelines — petrol, diesel, kerosene and ATF — are transported through a single pipeline network. However, in the Delhi-Panipat section (104-105 km) there is two-way movement.

A specific sequence is followed for transporting each product. These are high pressure pipelines and the movement of the products are monitored at the receiving stations.

The sequence cannot be changed as each product has different specifications. However, there are points where there is a mixing with the mother product. The products are transported from refinery to delivery terminal.

A close co-ordination with the optimisation group of the company is done. The crude pipeline can also meet the requirement of heavy crude.

Last fiscal, IOC has opened new facilities at Mundra port, on the West Coast, for handling of heavy crude oil and blending of heavy and normal grades. Besides, the challenge also lies in transporting Euro-III and Euro-IV products.

Is IOC looking at the gas pipeline projects also?

IOC would definitely like to go in for a gas pipeline network also. The technical part for the crude oil pipeline and gas pipeline remains the same, only the design system is different.

In fact, the company is laying its first gas pipeline in the Dadri-Panipat network which connects at GAIL (India) Ltd’s network at Dadri.

It can transport 10 mmscmd of gas and is expected to be commissioned in January 2009. Gas pipelines will be a big focus area for the company.

What are the expansion plans? What are the kind of investments IOC has planned for expanding its network?

Major pipeline projects are: a crude oil pipeline system from Paradip to Haldia (330 km); new product pipelines from Koyali to Ratlam (265 km), Chennai to Bangalore (290 km), Panipat to Jalandhar (275 km LPG pipeline), and Mathura to Bharatpur (21 km) and also its first gas pipeline from Dadri to Panipat (130 km).

IOC is looking at an investment of Rs 2,600 crore in the current year. In the remaining three years of the current Five-Year Plan, the company is looking at an investment of Rs 6,000 crore.

Now IOC is importing heavier crude for better margins, this has necessitated de-bottlenecking of its existing crude pipeline network.

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