The state-run Hindustan Petroleum Corporation Ltd has proposed to lay a Rs 1,300 crore (Rs 13 billion) pipeline from Mundra in Gujarat to Delhi for transporting petroleum products to northern India.
The company is planning the 1176-km pipeline, which will have a capacity of transporting 5.3 million tonnes of products a year, as an alternative to Indian Oil Corporation's Kandla-Bhatinda pipeline that is being converted into a crude oil pipeline.
The Kandla-Bhatinda line currently transports products to HPCL's petrol stations in Rajasthan, Madhya Pradesh, Delhi, Punjab, Haryana and parts of Uttar Pradesh.
HPCL chairman and managing director M B Lal on Monday made a high-pitch presentation to the petroleum ministry for being allowed to lay the pipeline, which the firm feels is absolute necessary for selling fuel in north India after IOC's pipeline becomes redundant for product transportation, official sources said in New Delhi.
The company feels it badly needs a dedicated supply line of its own to bring products from its Mumbai refinery. HPCL plans to either ship the products from Mumbai refinery to Mundra port and then pump it in the proposed pipeline or buy products from Reliance Industries' Jamnagar refinery in Gujarat and transport them.
Alternatively, it plans to import fuel at Mundra.
HPCL, which has over 4800 petrol pumps all over the country, owns 5.5 million tonnes Mumbai refinery and 7.5 million tonnes Vizag refinery.
HPCL sells 3.6 million tonnes of products every year in north India and it believes that owning a pipeline made economic sense when alternatives include transporting products through rail, road or through Reliance's proposed Rs 1,640 crore (Rs 16.40 billion) Jamnagar-Patiala pipeline and Rs 1,780 crore (Rs 17.80 billion) Jamnagar-Kanpur pipeline, sources said.
"HPCL felt there was an absolute necessity of owning a pipeline rather than being dependant on others for transporting products to a crucial market. Moreover, no one knows when the Reliance pipelines are going to come up," sources said.
HPCL plans to invest over Rs 2,787 crore (Rs 27.87 billion) in raising its Mumbai and Vizag refinery capacity through de-bottlenecking and process upgradation for higher volumes and better fuel quality.
De-bottlenecking of the primary and secondary processing units would result in HPCL's Mumbai refinery capacity going up to 7.9 million tonnes from 5.5 million tonnes while Vizag capacity would go up to 8.3 million tonnes from 7.5 million tonnes.
"Increased output from Mumbai refinery will find its way to north," they added.
