The Hindu : Petronet India may be wound up

Online edition of India's National Newspaper
Tuesday, Apr 15, 2003

Business

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Petronet India may be wound up

NEW DELHI APRIL 14. Petronet India, the joint venture of public sector oil companies for laying pipelines, is likely to be wound up as `it has out-lived its utility', official sources said. The step is being contemplated since all oil companies have now been permitted to lay pipelines on the basis of the common carrier principle, sources said.

Another reason for closing down Petronet is its failure to implement important projects such as the 1,760-km Central India pipeline and 523-km Chennai-Tiruchy pipeline.

Petronet India is the holding company promoted by State-owned Indian Oil Corporation, Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Petroleum Corporation (BPCL). It was set up in 1997 to prevent wasteful duplication of pipeline facilities and spread the economies of scale among all the interested companies.

"It is widely felt that this objective has been achieved in the guidelines issued by the Union Petroleum Ministry for laying product pipelines that provide for accommodating all interested parties in any proposed project," sources said. It has also been made mandatory to allow for a 25 per cent extra capacity that could be used by other companies.

Besides, the proposed downstream petroleum regulatory board has been entrusted with powers to fix tariff and sanction capacity of new pipeline projects, sources added.

Already there has been a move to shelve its prestigeous Rs. 2,450 crore Central India petroleum product pipeline project as the promoters are no longer keen on the project. The Central India Pipeline was to evacuate petroleum products from refineries in Gujarat to consumption centres in Central and North India. Sources said IOC was keen to lay a product pipeline from its Koyali refinery in Gujarat to Ratlam in Madhya Pradesh (the route of Central India pipeline) and was willing to team up with Reliance if it built the Jamnagar-Koyali part on its own and share the cost of the remaining stretch with IOC.

The Central India Pipeline project was to traverse from Jamnagar to Ratlam through Rajkot and Koyali. From Ratlam one section was to branch to Gwalior and the other section to Nagpur to feed the various consumption zones in Central India, sources said.

Petroleum products were to be injected in the pipeline at Jamnagar from Reliance's 27 million tonnes refinery and Essar's proposed nine million tonnes refinery and at Indian Oil's Koyali refinery. — PTI

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