Right-of-Use Hurdle Pushes Back ONGC's Hazira-Dahej Pipeline Project

---

Researched by Industrial Info Resources (Delhi, India)--Delays in the acquisition of "right of use" (RoU) have pushed back the completion of Oil and Natural Gas Corporation's (BSE:500312) (ONGC) (Dehradun, Uttarakhand) Hazira-Dahej pipeline project in Gujarat. The execution of 102-kilometer pipeline project has been held up for about seven months due to a logjam, which is inherent to pipeline projects in India. A slew of vital crude and petroleum-product pipeline projects that were identified for implementation in recent times have been stalled due to RoU hurdles.

The $35 million pipeline project is now likely to be on-stream by August 2013, as opposed to its original completion schedule of January 2013. The construction of the pipeline is running behind schedule due to obstructions caused by local residents in handing over the RoU to ONGC. The pipeline is passing through 47 villages in the state of Gujarat. Reportedly, farmers and landowners were demanding higher compensation for giving the RoU to ONGC.

In December 2011, Punj Lloyd Engineering Limited (BSE:532693) (Gurgaon, Haryana) was awarded the contract for laying the pipeline, and construction for the project began in April 2012. The feeder line will supply naphtha from ONGC's Hazira gas-processing facility to its upcoming petrochemical complex at Dahej.

The Hazira Plant is the largest gas-processing complex in India, with a designed capacity of 40.6 million standard cubic meters per day (MMSCMD) of sour natural gas and associated sour condensate. The plant was commissioned in December 1987, with a gas-based liquid petroleum gas (LPG) plant with a capacity of 5 million standard cubic feet per day, which was then scaled up through four subsequent expansions.

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.