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Cross country pipeline expected to be cleared soon

Pradeep Puri

The board of Central India Pipeline Ltd is meeting on Wednesday to take a final decision on the implementation of the 3,000 km cross country pipeline project. Armed with all the clarifications sought by it from various participants in CIPL's equity, and experts' opinion on the diameter of the pipeline, the board is keen to give a speedy approval to the project.

The board decision assumes significance in view of reports that some private sector companies are also keen on laying a similar pipeline.

Indian Oil Corporation and Reliance have 26 per cent equity each in the project while Essar holds 13 per cent. The project has been hanging fire because of strong opposition from public sector Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd.

The two state-owned companies have argued that the pipeline would kill their proposed refinery projects for Bina in Madhya Pradesh and Bhatinda in Punjab respectively.

The two companies have said that while their refineries have already been cleared and they have spent billions of rupees in acquiring the land for their projects, the CIPL project was proposed much later.

BPCL, for instance, has already spent Rs 1.40 billion on the project and has made financial commitments to the tune of Rs 2.20 billion. Similarly, HPCL, the foundation stone for whose Bhatinda refinery was laid by Prime Minister Atal Bihari Vajpayee, has also acquired the land needed for the project and has even built a boundary wall around it.

Both the companies are apprehensive that since the CIPL pipeline could easily supply petroleum products to the consumption areas earmarked for the proposed refineries, these refineries would become unviable in case the pipeline project is implemented.

The pipeline project envisages laying of the product pipeline from Jamnagar to Hyderabad passing through Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, Bihar and Andhra Pradesh.

It is proposed that in the first phase the pipeline would have a 550 km run from Jamnagar to Indore via Ahmedabad and would be completed within 36 months.

The first phase is expected to cost Rs 12.94 billion, including a forex component of Rs 4.57 billion. In the second phase it is envisaged to have a 933 km extension from Indore to Bhopal and Nagpur and finally Hyderabad, a 1,530 km branch pipeline from Ahmedabad to Patna via Udaipur, Kota, Gwalior, Kanpur and Allahabad, and another 230 km branching out from Ahmedabad to Hazira.

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