Saturday, October 1, 2022

These two PSUs have now joined India’s ambitious Rs 9,000-cr LPG pipeline project

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New Delhi: Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have each claimed a pie of India’s longest LPG pipeline project being laid by state-owned Indian Oil Corp (IOC). Both HPCL and BPCL have picked up a 25 percent stake each in the pipeline project that aims to take care of the cooking fuel needs of a fourth of the country’s population, the PSUs said in almost identical regulatory filings. Under the Rs 9,000-crore project, a pipeline will be laid down from Kandla in Gujarat to Gorakhpur in Uttar Pradesh.

IOC, which is laying down the pipeline, will hold the remaining 50 percent stake. “IOC, BPCL, and HPCL have signed an agreement on June 3, 2019, for the formation of a joint venture company for implementation and subsequent operation of 2757-km long LPG pipeline from Kandla, Gujarat to Gorakhpur, UP,” the filings said.

Pipeline will supply gas to 22 bottling plants

In the filing, the OMCs said that the pipeline will supply LPG to 22 bottling plants along the route. Additionally, the pipeline would feed gas through road-bridging to an additional 21 LPG bottling plants in Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, and Uttar Pradesh. “The proposed pipeline will source product from Kandla and other LPG import terminals on West Coast and two refineries at Koyali in Gujarat and Bina in Madhya Pradesh and would directly link 22 LPG bottling plants in Gujarat (3), Madhya Pradesh (6) and Uttar Pradesh (13) owned by the three promoter companies,” according to the filings. “The pipeline is expected to provide reliability in the supply chain of LPG. Besides economic benefit as compared to road transportation, movement of LPG by pipelines shall enhance safety as well,” the document said.

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IOC to use 3MT capacity

Indian Oil has committed to use 3 million tonnes of capacity while HPCL and BPCL have committed 1.8 million tonnes and 1.7 million tonnes respectively. Reliance Industries wants to use the pipeline to transport 242,000 tonnes of LPG. The LPG will be sourced by the companies from their respective refineries.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)

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