G. K. Nair
The SPM project will be the first to commence work at Puthuvypeen, where the PLL's LNG terminal, and a power plant are to come up. Once these projects are commissioned, Puthuvypeen may become the hub of major industrial activities in Kerala, says Mr M. A. Mohammed Ali, Director (Refineries), KRL.
He told Business Line that the SPM project is crucial for KRL to reduce the cost of transportation of crude, especially at a time when the company is expanding capacity from 7.5 million tonne per annum (MTPA) to 9.5 MTPA.
KRL receives crude from Bombay High and imports at the Crude Oil Terminal (COT) of the Cochin Port Trust and uses tankers of up to 70,000 million tonnes due to draft limitation of the Cochin channel. This results in higher transportation costs for KRL, especially when the crude is sourced from far off sources.
Using Very Large Crude Carriers (VLCCs) would substantially reduce the cost of crude for KRL. It is estimated that the company would save around Rs 200 crore on transportation cost. "To become globally competitive it is essential that KRL makes use of this freight advantage by setting up Crude Oil Receipt Facilities (CRF) on its own. The location of the facilities was thereafter agreed upon based on a mutually beneficial Memorandum of Understanding with the Cochin Port Trust," he said.
The proposed project consists of the following main facilities:
The SPM, Mr Mohammed Ali said, is a floating buoy anchored at a depth of 30 meters for mooring large tankers and for receiving crude through floating hoses, under buoy hoses and the submarine pipeline to the shore tanks.
The STF is being set up on 70 hectares taken on lease from Cochin Port Trust. The facilities envisaged at the STF are three 79-metre diameter crude oil tanks, booster pumps for pumping the crude oil from the STF to the refinery, which is 24 km away, an effluent treatment plant, fire-fighting facilities, rainwater harvesting, a green belt and so on.
The approved cost of the project is around Rs 623 crore (December 2002 basis). Initially I was to implemented on a Lump Sum Turn Key (LSTK) basis and global tenders were floated in mid-2004 for two packages. As the cost based on the lowest bid was much in excess of the estimated cost, it was decided to implement the project on a conventional (engineering and procurement by owner and erection by contractor) basis. Once completed, KRL is expected to make net saving of Rs 70 crore.
INTEC Engineering, Malaysia along with their associate FACT Engineering and Design Organisation (FEDO), was appointed Project Management Consultant in March 2005.The revised project cost is to come up for clearance at the next BPCL board meeting, this month, Mr E. Nandakumar, General Manager (Projects), KRL, said.
KRL has obtained the clearances from the Kerala State Pollution Control Board, the Ministry of Environment and Forests and the Site Appraisal Committee of the Kerala Government for setting up all the facilities. In-principle approvals have been obtained from the Indian Navy, the Cochin Port Trust, the Coast Guard, the Cochin Corporation and Greater Cochin Development Authority.
Mr Mohammed Ali said KRL had committed to spending about Rs 18 crore for developmental activities in the surrounding Panchayat area and in the Corporation area through which the pipeline is passing. The scope for this shall be finalised as per the advice of the District administration, he said. Tendering and procurement activities are in full swing. The Cochin Port Trust handed over the land to KRL on July 31, 2005. The target date of completion of the Project is by May 2007, he said.
Demanding tasks include laying concrete-coated pipes on the seabed and in the backwater and the construction of 79-metre diameter steel tanks over pile foundations. This makes the project implementation challenging.