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Pratim Ranjan Bose

Kolkata, March 29

IndianOil is mulling transportation of crude through pipeline from the upcoming SPM at Paradip in Orissa to solve the age-old crude availability constraints in Assam, and expand capacities of Guwahati refinery and Bongaigaon Refinery and Petrochemical Ltd. The latter is a subsidiary and is proposed to be merged with IOC.

Company sources told Business Line that IOC was actively considering reviving an idle crude pipeline of Oil India Ltd (OIL) between Guwahati and Barauni to pump crude to Guwahati refinery. The pipeline was originally used to supply light sweet Assam crude to Barauni refinery.

IOC has already held preliminary discussions with OIL for using the 3.5-million-tonne (mt) pipeline between Guwahati and Barauni. A feasibility study has also been launched to explore the possibility of laying a new crude pipeline (between Guwahati and Bongaigaon) for taking the supplies up to Bongaigaon.

Apart from the required investment over technology for usage of cheap heavy high sulphur crude, the considered pipeline transportation, if it comes through, may pave way for major expansion of Guwahati refinery and BRPL in the future. Built with Romanian technology in 1962, Guwahati refinery can process one mt of crude — marginally higher than the smallest refinery in the country at Digboi — and quite unviable in the current industry scenario. “Depending upon the economic feasibility of crude supplies through pipeline from Paradip, we may consider capacity expansion of Guwahati refinery and BRPL,” a company source said. Apart from paving way for refining capacity expansion from the existing 2.35 mt, the availability of cheaper crude will add to BRPL’s margins. The company is currently on course to make major investments in adding higher value products in its portfolio.

Meanwhile, delay in implementing the SPM at Paradip had led to further delay in transportation of crude through the Paradip-Haldia pipeline. The Rs 1,178-crore project is now expected to be completed in April. The pipeline will be connected with the existing Haldia-Barauni pipeline to transport crude up to Barauni. Both the Haldia and Barauni refineries can process six mt each and is on an expansion mode.

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