BPCL and HPCL to each acquire 25% stake in IOC’s LPG pipeline project

Bharat Petroleum (BPCL), Hindustan Petroleum (HPCL) and Indian Oil Corporation (IOC) have signed a joint venture agreement in which BPCL and HPCL will each own a 25% stake in IOC’s LPG pipeline project.

The remaining 50% stake will be held by IOC.

The project involves laying of a 2,757km-long liquefied petroleum gas (LPG) pipeline from Kandla in Gujarat to Gorakhpur in Uttar Pradesh. Once built, it will be the country’s largest LPG pipeline.

The Rs90bn ($12.9m) project will feed LPG to 22 bottling plants in three states.

Located in Gujarat, Rajasthan, Madhya Pradesh, Maharashtra and Uttar Pradesh, these bottling plants are being fed by tanker trucks.

The proposed pipeline is expected to carry a capacity of 8.25Mtpa of LPG, reported Economic Times.

It will transport LPG from the Kandla import terminal and west coast refineries to the north via Ahmedabad in Gujarat; Bhopal and Ujjain in Madhya Pradesh; Allahabad, Varanasi, Kanpur and Lucknow in Uttar Pradesh.

IOC was quoted by the Times of India as stating: “The pipeline is expected to provide reliability in the supply chain of LPG. Besides economic benefit as compared to road transportation, movement of LPG by pipelines shall enhance safety as well.”

IOC has committed to using 3Mt of the total capacity, while HPCL and BPCL will respectively use 1.8Mt and 1.7Mt.

In March, BPCL awarded British oilfield services firm Petrofac with a $135m engineering, procurement and construction (EPC) contract for the Kochi refinery in Kerala, India.

Under the contract, Petrofac is required to provide engineering, procurement, construction and pre-commissioning services, as well as assist with commissioning for a period of 27 months.