Date:26/05/2007 URL: http://www.thehindubusinessline.com/2007/05/26/stories/2007052602170200.htm

Back Paradip-Haldia crude pipeline to be ready soon

Our Bureau

IOC replaces Iranian SPM project contractor

There are chances of escalation in project cost depending upon the legal developments.

Kolkata May 25 After a delay of more than a year, Indian Oil Corporation (IOC) is now poised to complete the Paradip-Haldia crude pipeline, hopefully in a month or two.

The project will reduce the transportation cost of crude to both Haldia and Barauni refineries in West Bengal and Bihar respectively.

The Rs 1,178-crore project - including single-point mooring and storage facility at sea port at Paradip in Orissa - had run into rough weather following a series of problems involving project design, environmental clearance and differences with the Iranian contractor deployed to complete the SPM and the connecting offshore pipeline.

SPM project contractor

According to sources, to hasten the process, the company recently replaced the SPM project contractor - Iranian Offshore Engineering and Construction Company (IOEC) - with Oil and Gas Engineering Systems of Australia.

IOEC was charged with inordinately delaying completion of the project.

Escalation

Though the decision may lead to legal complications between IOC and IOEC, IOC is now hopeful of completing the project shortly. There are, however, chances of escalation in project cost depending upon the legal developments.

"The Australian company has just set foot on the project. There is 30-35 days residual work left in regard to the offshore pipeline connecting the SPM to onshore storage facility. However, considering the heavy monsoon in the East coast, which is about to arrive, there may be some minor delay. Overall we are now hopeful to complete the project in next two months," a senior company official said.

Sub-surface pipeline

Meanwhile, IOC sources said Punj Llyod has helped overcome technical problems in laying the 330 km sub-surface pipeline from Paradip to Haldia crossing a number of river estuaries, including the largest and most difficult of them all - the estuary of the Mahanadi.

"There were serious problems in laying the pipeline under the Mahanadi leading even to a change in design. However, the project contractor struck to work at the agreed cost," the official said, adding that the pipeline project has been completed.

It is of interest to note that Iranian Offshore Engineering and Construction Company has previously faced similar charges from ONGC for a pipeline-cum-platform modification project.