ESSAR Oil Ltd (EOL) has offered to implement the Central India pipeline project (CIPL), earlier abandoned by Petronet India Ltd. The company has offered to buy Petronet s equity of $86.9million, and has written to PIL asking for the handover of the 1,700-km project. Essar Oil is also negotiating with oil companies abroad for a possible tie-up to implement the project. Talks with financial institutions are also under way to part-finance the project.
According to sources, the total cost of the project was $347.8million, which would be funded through a debt-equity ratio of 3:1. The equity in CIPL is likely to be jointly shared by Essar Oil and the foreign partner. EOL bid in response to Petronet s global tender to lay the pipeline on a build-own-operate-transfer basis.
The pipeline will be useful for Essar s 12 million tonne refinery on the Indian coast at Vadinar in Jamnagar, besides Bharat Petroleum s 6Mtons/yr refinery at Bina in Gujarat.