The IBP-Caltex row has given a shot in the arm to the Indian Oil Corporation-Petronas proposal for the setting up of a 600 million tonne per annum (mtpa) liquefied petroleum gas (LPG) terminal at Haldia.
The finance ministry has so far been blocking the proposal since IBP-Caltex had also submitted a similar proposal to the government. The ministry felt that considering the demand-supply position and the constraints at the Haldia port, there was room for only one LPG import terminal there.
After the recent decision of IBP and Caltex to go it alone regarding the marketing of their lubricants, it is clear that the two companies may not like to implement the project together. Realising this, the petroleum ministry has started pushing the IOC-Petronas project with renewed vigour.
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Even the Oil Co-ordination Committee (OCC) has supported the IOC-Petronas project. In a recent communication to the petroleum ministry, OCC has said that in view of the doubts being expressed about the implementation of the Sultanpur refinery, "The investment made for the creation of import facilities by IOC at Haldia will not become infructuous and in fact, will go a long way in meeting the LPG demand in the eastern region since only this facility is likely to come up by early 2000 and other facilities can come up much later."
The OCC has also said that IBP and Caltex should be "advised to review their decision regarding creation of import facilities at Haldia since the progress made by them so far has been negligible as compared to the IOC project."
The proposal to set up import facilities at Haldia was submitted by IOC-Petronas in 1991. Around the same time, IBP-Caltex also submitted a similar proposal to the government. Bharat Petroleum Corporation Limited (BPCL) submitted a third proposal to set up LPG import facilities at Paradip. Immediately after submitting the proposal, IOC asked Haldia Development Authority for the allotment of land. It obtained FIPB and Secretariat of Industrial Approvals (SIA) clearances in March 1997.
It also obtained the approval of the department of company affairs (DCA) in December 1997, for making an investment of Rs 45 crore in the equity shares of the joint venture company.
It started the execution of the project and signed a memorandum of understanding (MoU) with the Calcutta Port Trust for utilisation of jetty facilities for unloading of tankers and allotment of space for two unloading arms at the jetty. IOC has also obtained approval for the laying of docklines.