Bharat Petroleum Corporation Ltd (BPCL), the state-run oil major, has firmed up its plan to construct a pipeline from Gopalpur on the Orissa coast to Allahabad in Uttar Pradesh at an estimated cost of nearly Rs 3,000 crore.
The project also includes building a COT (crude oil terminal) at Gopalpur for importing crude oil. This dedicated pipeline would cater to BPCL's proposed refinery at Allahabad in Uttar Pradesh.
"The project cost envisaged for COT is around Rs 500 crore. COT would require 300 acres of land. We are in dialogue with Orissa government for suitable locations," a top BPCL official informed.
The pipeline would originate at Orissa and then travel through Jharkhand before reaching UP. BPCL has also initiated dialogue for necessary 'right of way' (RoW) for building the pipeline.
"Allahabad being a landlocked location we need to have dedicate pipeline for uninterrupted supply of crude," company sources added. The Gopalpur terminal would import crude from countries in the south east and central Asia.
On the other hand, the Allahabad refinery would be built at an estimated expenditure of Rs 9,000 crore. This will help company strengthening its position in northern India where BPCL is not so strong compare to other PSU oil majors. The capacity of Allahabad refinery is going to be 7 million tonne. BPCL had received the first stage clearance for this project.
The company hopes to meet the huge capital expenditure of nearly Rs 12,000 crore (COT, pipeline and refinery) by raising debt from financial institution and through internal accruals. Ideally, it is looking at 2:1 debt equity mix to finance the capex. In the last financial year, BPCL's turnover stood at 45,932.1 crore with net profit at Rs 820.1 crore. Its reserve on March 31, 2001 stood at Rs 3779.9 crore.
The company is also exploring the possibility of exporting its products from Numaligarh Refinery Limited (NRL) in Assam to Bangladesh. NRL's products have received extremely good response in Bhutan as it suits their cold environment and now it would be looking for exports to Bangladesh, a top BPCL official said.
Presently, BPCL's total refining capacity is 18 million tonne and it buys 2 MT more from Reliance Petroleum to meet its demand. BPCL is also building another refinery at Bina which is capacity of 6 MT.
