Forest Clearance Mires Indian Oil's Paradip-Durgapur Pipeline Project

---

Researched by Industrial Info Resources (Delhi, India)--India's oil-major Indian Oil Corporation Limited's (BSE:530965) (IOCL) (Delhi) $185 million Paradip-Haldia-Durgapur liquefied petroleum gas (LPG)-pipeline is facing a setback due to a pending forest clearance from the state forest department of Odisha. IOCL has received this vital clearance for the interstate pipeline from the authorities of all six districts through which the pipeline is going to pass in the state of West Bengal; however, the company still awaits a response from the Principal Chief Conservator of Forests in Odisha in this regard.

Meanwhile, the right of use issue, which caused substantial delays in the execution of the project, has now been resolved, and No Objection Certificates (NOC) have been acquired by the company from the state pollution control boards of West Bengal and Odisha.

The 680-kilometer pipeline will transport LPG from Paradip Refinery to IOCL's bottling plants at Balasore, Budge Budge, Kalyani and Durgapur. The completion of the refinery project is scheduled at the end of 2013. Currently, LPG requirements of these plants in Eastern India are being met by Haldia and Barauni refineries by road. The laying of the pipeline will lead to substantial savings with delivery facilities en route Balasore, Budge Budge, Kalyani and Durgapur. The pipeline cost of transportation works out to be 43% cheaper than the road tanker freight.

The project was proposed to be completed within 30 months from the receipt of all statutory clearances. The IOCL Board has approved the project in February 2011, but as of now, the project has achieved a progress of only 19.3%. The scheduled progress of the project has still not been worked out. It will be assessed only after the receipt of statutory clearances.

Indian Oil operates a network of 11,163-kilometer long crude oil, petroleum product and gas pipelines with a capacity of 77.258 million metric tons per annum of oil and 10 million metric standard cubic meters per day of gas.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.