| The much-debated evacuation of Cairn India's "waxy" crude oil from its Rajasthan fields is likely to reach its logical conclusion with the company appointing international consultant JP Kenny for carrying out technical studies on the proposed pipeline from the oil field to the Gujarat coast.
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| JP Kenny is one of the world's largest pipeline and subsea engineering and management contractors.
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| "We are preparing and going ahead with all the ground work for the pipeline so that once the pipeline agreement is finalised with ONGC, there is no delay in starting off work," a senior Cairn official said.
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| JP Kenny has a team for engineering onshore pipelines in India. The pipeline will take 12-18 months to construct.
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| The company has also started discussions with a US-based company for
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| consultancy work on laying a heated pipeline that will keep its waxy oil crude flowing.
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| The crude oil that Cairn has discovered in Rajasthan is waxy in nature and tends to coagulate at normal temperatures.
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| Even as technical work on the pipeline has kicked off, the pricing of the crude oil from the fields has not yet been agreed upon.
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| "That is an issue that is still under discussion," the Cairn official said.
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| Earlier, Oil and Natural Gas Corporation (ONGC), which has 30 per cent stake in the Rajasthan field, had appointed Engineers India to undertake a technical feasibility study for the pipeline.
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| "There will be two heating stations along the length of the pipeline. The other option is to keep the entire pipeline heated without any intervening heating stations.
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| The US-based company has the expertise to lay such a pipeline," the Cairn official said. He, however, said it was too early to disclose the name of the company.
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| Refiners such as Indian Oil Corporation have been calling for a discount on the crude oil saying the oil is waxy and will need special treatment and high refining technology.
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| ONGC, too, wants its subsidiary Mangalore Refinery and Petrochemicals (MRPL) denominated as the official offtaker of the crude oil as Cairn has not been ready to offer it discounts.
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| "We have not yet reached an agreement with anyone on where the crude oil will go. IOC, and the private sector refineries in Gujarat are all potential buyers. We are in talks with all of them," the Cairn official said.
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| The 340 km long pipeline is expected to cost around $1 million per km. Cairn and ONGC, 70:30 partners in the Rajasthan field, will share the pipeline cost in the same equity proportion. The Rajasthan fields have a potential plateau production of around 1,50,000 barrels of oil per day. |
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