The Hindu Business Line : Pipeline for Rajasthan crude: ONGC, Cairn near consensus

A consensus seems to be emerging between state-owned ONGC and Cairn India Ltd to build a pipeline to transport crude oil found in Barmer, Rajasthan to a nearby port city.

This could put to an end to the speculations on how the crude from the Rajasthan fields would be evacuated.

Sources told Business Line, "Feasibility study on the technical aspects of the pipeline is currently going on, as the crude from Rajasthan requires a proper heating arrangement."

A route survey is also being undertaken, the source added.

However, sources maintained that this was one of the options being considered for evacuating Rajasthan crude.

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 and the size of pipeline that is required.

Sharing costs

Indications are that the pipeline cost would be part of the field development plan for the Rajasthan fields, as this would be recoverable.

Sources 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.

Indications are that a possible route has been suggested, which would be a pipeline to Indian Oil Corporation's Viramgam pipeline terminal in Gujarat.

Viramgam is connected by pipelines to IndianOil's Koyali, Panipat and Mathura refineries, these could be the potential customers of Rajasthan crude.

Smaller pipeline can be built at the coast or at Jamnagar, where Reliance Industries and Essar Oil have refineries.

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Pipeline for Rajasthan crude: ONGC, Cairn near consensus