State-owned Indian Oil Corporation (IOC) has decided to implement a floating storage offshore (FSO) system 50 km off Haldia at Sand Heads in Kolkata to bring down its crude unloading cost.
It is inviting global expression of interests for the system, which should be able to handle the increased crude oil imports at the port because of the higher requirement at IOC's expanded Barauni refinery.
It is learnt that the Shipping Corporation of India (SCI), which earlier had a old very large crude carrier (VLCC) that could have been used as FSO, may not be able to bid this time since the VLCC has been scrapped.
In a recent presentation to the petroleum ministry, IOC said the port charges by the Haldia Port Trust are the maximum in the country. Moreover, the draught at the port is not adequate to allow for docking of larger vehicles.
IOC claimed that the assurance given by the port trust regarding taking steps like desiltation to improve the draught have not been implemented.
On the contrary, the draught is getting weaker because of the diversion of water from Farakka leading to siltation at the port.
The public sector oil giant said that its requirement of crude oil imports at the port have gone up following the hike in Barauni refinery's capacity from 4.2 million tonne to 6 million tonne.
Earlier, this refinery used to get all its crude requirements from Assam. However, with the expansion of the Barauni refinery and the setting up of Numaligary refinery, Assam crude is not sufficient to feed these refineries.
It is planned that in the first phase, crude would be brought in through VLCCs and unloaded in the FSO. From the FSO, it would be transported to the shore through "daughter vessels."
In the second phase, a 50 km pipeline may be laid from the FSO to the shore and this is expected to cut down the crude handling charges considerably.
Some two years ago also IOC had planned to put up an FSO at Sand Heads. SCI had even offered one of its old VLCC for the purpose.
However, it is learnt that the talks broke down since Indian Oil was of the view that SCI was demanding a high price for the VLCC.
In the meanwhile, IOC started toying with the idea of importing crude oil at Paradip port which has a strong draught, and bring it to Haldia through a pipeline.
This was also dropped when it was realised that the cost of the pipeline could not be economically justified.
