Our Bureau

Chennai, July 18

INDIAN Oil Corporation Ltd plans to lay a petroleum products pipeline between Chennai and Bangalore, for which it hopes to begin work on an initial survey.

The company is all set to pump products into the Chennai-Tiruchi-Madurai pipeline by the end of this month, and the first parcel is expected to be received in Madurai on August 15.

The IOC Director-Marketing, Dr N.G. Kannan, told reporters on Monday that the company's board had approved a feasibility study for the Chennai-Bangalore pipeline. Simultaneously, the company will approach the Railways for a discount on freight. If the discount is more than 25 per cent then the pipeline would not be viable, he said.

Company officials said the board had accorded "first stage clearance" for the 290-km pipeline, which is expected to cost about Rs 250 crore. This will be followed by a detailed feasibility report before the project is taken up.

IOC officials said, once the Chennai-Tiruchi-Madurai pipeline is fully commissioned, it will do away with 25 tanker moves an hour (of 12,000 litre capacity).

IOC had built tankages at Sankari, in Salem district, Madurai and Tiruchi as part of this pipeline project. In the first stage, this pipeline project will have a capacity of 1.8 million tonnes a year and by 2010, when it will be fully completed with a pumping station at Asanur, the capacity will go up to 2.3 mt.

Mr Kannan said IOC also plans a pipeline between Manali, in north Chennai, where Chennai Petroleum Corporation Ltd, an IOC subsidiary, has its refinery, and the airport in Meenambakkam. This 90-km pipeline will cost about Rs 50 crore and touch Sriperumbudur on the national highway to Bangalore before terminating at Meenambakkam. This pipeline will be used to transport aviation turbine fuel (ATF). ATF consumption at Meenambakkam had increased from 700 kilolitres a day to 1,000 kl now, thus justifying a pipeline.

Noting that private petroleum companies were getting aggressive in the retail sector, Mr Kannan said IOC would also expand its retail presence throughout the country and open a little over 1,000 outlets this year. The marketing division's budget for the year is Rs 2,400 crore of which Rs 1,125 crore will be spent on the retail sector in expanding, modernising and automating the outlets.

Private players are selling about 2,00,000 tonnes a month of petroleum products against 75,000 tonnes last year.

Mr Kannan said IOC would also concentrate on direct sales to large consumers and match the discounts offered by private players.

(This article was published in the Business Line print edition dated July 19, 2005)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.