Cairn India suspends work on Salaya-Bhogat pipeline

Private sector oil explorer, Cairn India Ltd has suspended pipeline work on Salaya - Bhogat section in Jamnagar district due to continued opposition from the local groups.

In a letter written to the district collector of Jamnagar district in Gujarat, Cairn India informed about the suspension of Salaya-Bhogat pipeline construction activity on account of work stoppages due to lack of Right of Use (RoU) access from April 25, 2012. For last 15 months, the project has been lying standstill as the local politicians and farmers do not allow the land acquisition by the company.

The 80-km Salaya-Bhogat section is a part of Cairn India's 670-kilometer Barmer - Bhogat pipeline project, which is meant to transport crude oil from Cairn India's Rajasthan oil fields to different oil refineries located along the route. The pipeline passes through two districts of Rajasthan and six districts of Gujarat.

 

"We've suspended work on Salaya-Bhogat section from April 25 onwards due to stiff opposition from the locals. This will adversely affect Cairn India's plans to supply crude oil to coastal refineries in the country including PSUs like Mangalore Refinery and Petrochemicals Ltd (MRPL) and several others," said a company spokesperson.

This would also restrict company's oil production from reaching the target of 240,000 barrels per day (bpd) from the current oil production of 175,000 bpd, he added.

Larsen and Turbo Ltd (L&T) was awarded the work of laying down the pipeline.

"We wish to bring to your notice the fact the contractor entrusted with the task of pipeline laying work had to suspend the work formally for want of access to RoUs. This avoidable and unfortunate development will have significant negative impact on the company, our joint venture partners of this project," the company wrote in its letter to the Jamnagar district collector.

At present the 590-km Barmer to Salaya section transports crude oil to refineries such as Indian Oil Corporation Ltd and other private refiners. L&T has been asked to suspend its work for pipeline laying and close its camp at Khambaliya till further notice.