-
PSU oil firms question Adani’s plan to set up Dhamra LPG terminal and pipeline project
India’s three state-owned downstream oil firms have questioned Adani Group’s plans to set up a 650-Kilometer pipeline network that will connect Adani’s planned 1.6 million tonne LPG terminal at Dhamra port in Odisha to Asansol in West Bengal and Duttapulia near the Indo-Bangladesh border.
Adani Gas Ltd (AGL), the natural gas distribution arm of Adani Enterprises, plans to capture the fast growing market for cooking gas in Eastern India and Bangladesh through the pipeline. However, the three PSU fuel retailers – Indian Oil (IOC), Bharat Petroleum (BPCL) and Hindustan Petroleum (HPCL) – have raised questions on the ambitious project in separate submissions to the downstream regulator Petroleum and Natural Gas Regulatory Board (PNGRB).
An email sent to Adani seeking response on the PSUs’ questions remained unanswered. Experts said setting up an LPG import terminal of 1.6 mtpa capacity could entail an investment of close to Rs 1,500 crore.
AGL had in April this year submitted an Expression of Interest (EoI) to PNGRB seeking authorization for laying the pipeline. Adani plans to make the terminal operational by mid-2018 and expects the initial volume to be around 1.6 MTPA which will be later increased to 2.5 MTPA. The IOC-BPCL-HPCL combine, however, has raised questions on the issue of parallel infrastructure – another LPG terminal being built by BPCL and Aegis Logistics at Haldia and a parallel 670-Km pipeline being constructed by IOC from Paradip to Durgapur via Haldia.
“HPCL is of the view that due to upcoming LPG import terminal at Haldia by ALL and BPCL, there is no foreseeable requirement for LPG import terminal in the proposed pipeline route from Dhamra to Haldia,” HPCL has told PNGRB. The country’s third largest fuel retailer is already proposed to book 150 thousand metric tonne per annum (TMTPA) of the IOC pipeline.
HPCL has also tied-up for usage of the upcoming import facility at Haldia with ALL. It stated that Adani Gas will have to make provision for input to their proposed pipeline from the ALL terminal for throughput of HPCL. IOC has also called the proposed pipeline by Adani Gas parallel infrastructure. Dhamra stands at a 30-Km distance from the route of the IOC pipeline and the distance between Duttapulia and Kalyani (the end point of IOC pipeline) is 50-Km, IOC has told the regulator.
“Out of the around 650-Km pipeline route, for almost 550-Km, Adani Gas’ pipeline route is similar to IOC’s under-construction pipeline. With the requirement of major LPG marketers – IOC, BPCL and HPCL – being met by IOC’s pipeline, there might not be a need to create parallel infrastructure,” the nation’s largest fuel retailer said. The firm has already constructed 250-Km of the total 670-Km pipeline and plans to further extend it to Patna and Muzaffarpur.
Raising similar questions, BPCL has said that there is no requirement of LPG from Dhamra port up to Haldia. “However, in exigencies and after evaluating the economics and circumstances, the option to use Dhamra can be exercised,” the company told PNGRB, adding the reason for terminating the (Adani Gas) pipeline at Asansol is not clear.
According to Adani’s EoI, the proposed pipeline from Dhamra to Asansol and the Duttapulia pipeline would help evacuate cargo from the upcoming LPG terminal and help in increasing the penetration of LPG in the under-serviced markets of Odisha, West Bengal, Jharkhand and Bihar. AGL has been operating CGD networks in Vadodara and Ahmedabad since 2004 and Faridabad since 2009.
The company also holds a 50:60 joint venture with IOC authorized by PNGRB to develop and operate CGD networks in Allahabad, Chandigarh, Panipat, Daman, Ernakulam and Dharwad. AGL services a customer base of around 350,000 daily through a network of 65 CNG stations, 400 Km of steel pipeline and 5,850 Km of Medium Density Polyethylene (MDPE) pipeline.
According to Adani Gas, the availability of draft and the infrastructure for handling Very Large Gas Carriers (VLGCs) were major considerations for selecting the location of the import terminal at Dhamra port. India consumes around 18 MT of LPG annually even as domestic production stands at 10 MT. The country imports more than 8.3 MT of LPG a year. The LPG consumption is expected to grow to 25 MT in 2020 of which nearly 16 MT will be imported.
LPG consumption in the Dhamra hinterland has also grown to 2.8 MTPA driven by sharp rise in demand in West Bengal, Odisha, Jharkhand, Bihar, Chhattisgarh, Bangladesh and the north-Eastern regions of India. Bangladesh’s LPG supply is also heavily import-dependent. That nation consumed 150,000 tonne of LPG last year of which only 22,000 was produced locally. Tre Flowers Authentic Jersey
Share This
