MRPL to buy Cairn output from Rajasthan fields

The government has named Mangalore Refinery and Petrochemicals Ltd, a unit of state-run Oil and Natural Gas Corporation, as the buyer of Cairn India's initial output from its prolific Rajasthan oilfields that are expected to begin production within a month from now.

"We have named some of the refineries as government nominees to take Cairn crude," Petroleum Secretary R S Pandey told reporters on the sidelines of a conference here today.

MRPL has been appointed as the buyer of the initial crude oil and state-run refiner Indian Oil Corporation (IOC) would take the crude once volumes rise.

"I am told crude oil production will begin in about a month's time in small quantities," Pandey said.

Cairn will initially produce 4,000 to 5,000 barrels of oil per day from its fields in Barmer district of Rajasthan which would be transported in trucks to Kandla on Gujarat coast for onward shipment to Mangalore.

Koyali, where the oil can be transported in trucks, does not have facility which can unload the waxy Rajasthan crude that turns solid at room temperature. Also, it does not have heated storages.

Output from the Mangala field, the first of the three fields Cairn is putting to production, would rise to 30,000 barrels per day (1.5 million tonnes) in July-September.

The initial output will be transported through trucks. A heated pipeline to transport the crude to Gujarat coast would start in the fourth quarter, when an additional 50,000 bpd will be produced.

Peak output of 1,75,000 bpd (8.75 million tonnes a year) from the Mangala, Bhagyam and Aishwariya fields in Rajasthan block is to first go to state refiners, Pandey said.

IOC has indicated that it can take 20,000 bpd (one million tonnes) at its Panipat refinery in Haryana and another 0.5 million tonnes at Koyali unit in Gujarat once a delayed coker is installed at the refinery.

Mangalore Refinery, which is the official offtaker of Rajasthan crude, wants only 1.2 million tonnes while Hindustan Petroleum says it can take 0.5 million tonnes at its Vizag unit. The remaining unsold output would go to private refiners, he said.

Though IOC had indicated it can take up to 1.5 million tonnes of Rajasthan crude between its Koyali refinery in Gujarat and Panipat refinery in Haryana, the company would not immediately take the initial volumes as it lacks receiving facility at the refineries.