Indian Oil Company Limited's Paradip-Haldia-Durgapur LPG Pipeline Project Progresses at Slow Pace

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Researched by Industrial Info Resources India (Delhi, India)--Problems regarding land acquisition continue for Indian oil and gas major Indian Oil Corporation Limited (BSE:530965) (IOCL) (New Delhi) for its Paradip-Haldia-Durgapur LPG pipeline project. In the past, the land acquisition issue created several problems for many companies in the completion of the project.

In West Bengal, land acquisition comes with added risks that many leading industrial houses have discovered. IOCL's own efforts in acquiring land for its Paradip-Haldia-Durgapur LPG pipeline have yielded very little. The company has not been able to get possession of cleared land from the Haldia Development Authority (HDA). The construction of the station in Haldia is on hold due to a delay in getting the land. The work order for the construction of the Haldia station was issued in January 2012, but the construction work cannot commence without the land possession from the HDA.

The project involves laying a pipeline for transportation of LPG from Paradip and Haldia to the LPG bottling plants at Balasore, Budge Budge, Kalyani and Durgapur. The total length of the pipeline is about 680 kilometers.

As part of the project, stations also will be set at Belmuri and Raghudevpur in West Bengal. While an application for land at Belmuri has been submitted to the state government, negotiations are in progress with land owners at Raghudevpur.

The project was proposed to be completed within 30 months of receipt of all statutory clearances. The IOCL board approved the project in February 2011, but the project has progressed only 12.6%. The scheduled progress of the project has still not been worked out, as it will be assessed only after the receipt of statutory environmental clearances. The financial progress of the project has made a mark of merely 1.33%, with $2.4 million spent as of now, against the total approved cost of $185 million. For the financial year 2012-13, a total budget of $50 million is approved for the project, as not much progress is expected during the time.

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