Date:06/04/2006 URL: http://www.thehindubusinessline.com/2006/04/06/stories/2006040603580500.htm

Back IOC plans to lay LPG pipelines to cut costs

Pratim Ranjan Bose

Pipeline plans
LPG pipelines could be our future thrust area. We have already set up a group to study the possibility of setting up LPG pipelines across the country. The report will be available in a new months, says an IOC official.

Kolkata , April 5

Having laid 10,000 km of crude and liquid product pipelines across the country connecting its refineries, IOC has now set its sights on LPG pipelines to improve profitability.

The company has also finalised its first ever natural gas pipeline project from Dadri to Panipat (132 km).

Studies are under way to look into the possibility of setting up an ATF pipeline connecting major airports, including Chennai and Bangalore.

Sources said that the company is proposing to set up a 275-km LPG pipeline from Panipat refinery in Uttar Pradesh to Jalandhar in Punjab.

The Rs 152-crore project proposal is scheduled to be placed before the board at its next meeting.

"LPG pipelines could be our future thrust area. We have already set up a group to study the possibility of setting up LPG pipelines across the country. The report will be available in a new months," a company official said.

As per initial estimates, the pipeline network would bring down the transportation costs of LPG by 10-15 per cent, the official added.

Reiterating that such pipeline projects would be taken up only if there is a clear positive impact, the sources said that the company nearly exhausted the possibility of extending its crude and liquid product pipelines.

"We have invested heavily on crude and product pipelines during last few years. A large number of projects are already implemented and a few more are either under commissioning or lined up. The investments have already started bearing fruit through lower transportation cost and higher refining margins," the sources said.

IOC is also closely watching developments in the gas pipeline sector. It has decided to set up its first ever gas pipeline to ferry its share of gas from Petronet LNG to Panipat refinery. The Rs 250-crore project has already been approved by the board.

"We are waiting for the gas regulator to come into being to plan our entry in gas grid sector," the official said.