PIL’s decision to build Kandla-Bathinda line

This decision is being taken in view of saving its loss of RS 3.83 billion ($78.1 million) spent on the Vadinar-Kandla product pipeline in Western Indian state of Gujarat.

“We want the Vadinar-Kandla pipeline to be operative and are already in talks with oil companies like Indian Oil, Essar, and Reliance for equity participation in the proposed company for setting-up a parallel product pipeline,” K.K.Sinha, PIL’s managing director, said.

The Indian Oil Corporation (IOC) decision, announced on last March, has irritated the company regarding the conversion of the existing Kandla-Bathinda product pipeline into a crude carrier, thus leaving the fate of the operational Vadinar-Kandla in limbo. IOC’s Kandla-Bathinda pipeline is connected to PIL’s Vadinar-Kandla pipeline, as the latter was conceived with the sole intention of exporting petroleum products from Essar Oil Ltd’s proposed 9-million tonne refinery in Vadinar. However, as the Essar refinery is silent over the matter, PIL’s Vadinar-Kandla at present is carrying products from Reliance Industries Ltd’s Jamnagar refinery to IOC’s installation in Kandla, from where which are then carried onwards by the oil major’s pipeline to the deficit areas of northern India.

Ironically IOC played a role of management consultant to the project and also holds a 26% stake in Petronet VK Ltd, the company which has laid the pipeline. Other stake holders in the company are IOC and Petronet India with 26%, Reliance Industries 13%, Essar%, ILFS 5%, the State Bank of India 5%, Gujarat Industrial Development Corporation Ltd 5%, 5%, and Canara Bank.

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