Reliance reviews plan to set up six pipelines

Reliance Industries is looking afresh at the six product pipelines for which it received government nod in the last week of January even as it has initiated informal talks with Indian Oil Corporation (IOC) to join hands for the project.

"We had applied for setting up of these pipelines long time back. We are now reviewing these projects, though it does not mean that we will not go ahead with the plans," said Nikhil Meswani, executive director, Reliance Industries at the sidelines of a seminar, Chemtech 2005 international conference, here on Thursday.

Industry sources said RIL is not going ahead with all but one of its proposed pipeline.

"With the changing industry dynamics, Reliance has decided to go ahead with only one product pipeline of the six, and for the remaining is in talks with IOC," the source added.

Earlier, RIL was keen on constructing these pipelines on common carrier principle with 25 per cent excess capacity than it needs. This excess capacity was then expected to be shared with other oil companies on a take-or-pay basis.

Reliance had sought the government's approval through its subsidiary, Gas Transportation and Infrastructure, for laying six petroleum product pipelines across the country to sell products from its refinery at Jamnagar in Gujarat.

The six proposed pipelines for which it received approval are the Rs 1,640 crore Jamnagar-Patiala pipeline, Rs 1,780 crore Jamnagar-Kanpur pipeline, Rs 460 crore Goa-Hyderabad pipeline, Rs 325 crore Chennai-Bangalore pipeline, Rs 110 crore Kakinada-Vijayawada pipeline and the Rs 260 crore Haldia-Ranchi pipeline.

According to industry sources, Reliance is keen on implementing the Jamnagar-Patiala product pipeline as "it will feed the high growth states of north India".

Reliance intends to use IOC's pipelines to transport its products and set up 'spur pipelines' to reach its markets.

Sources claim that Reliance is unhappy with one of the conditions stipulated for the contract which requires it to furnish bank guarantee of 2 per cent of the project outlay if it fails to commission the projects within the time frame.