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BPCL eyes petro products from RIL

August 20, 2003 18:46 IST

Bharat Petroleum Corporation Ltd is seeking petroleum products from Reliance Industries Ltd to meet the 4 million tonnes fuel deficit it has in the Northern India.

"We are talking to RIL for product off-take agreement post March 2004, when the current contract expires," BPCL chairman and managing director S Behuria told a news conference in New Delhi.

Currently, BPCL takes about 2.3 million tonnes of RIL products -- petrol, diesel, LPG, kerosene and jet fuel -- for sale through its retail network.

RIL, which at present does not have a retail network, had in March 2002 entered into a two-year pact with public sector oil retailing firms Indian Oil, BPCL and Hindustan Petroleum Corporation Ltd for sale of its 13.1 million tones products annually.

"We don't have a direct supply line for the north and as such are facing a deficit of 4 million tones, which we propose to bridge through products from refiners like RIL," he said adding BPCL was also in talks with Oil and Natural Gas Corp and Gail for lifting LPG stocks.

BPCL, which has a 9 million tonnes refinery at Mumbai and subsidiary refineries at Kochi in Kerala and Numaligarh in the North-East, gets product supplies for petrol stations in the north from IOC refineries.

For the same reason, BPCL is also keen on taking a quarter of the capacity in either of the two pipelines planned by RIL to link its Jamnagar refinery in Gujarat to the north.

Behuria said BPCL was exploring taking a share in RIL's proposed 2,540-km pipeline to Kanpur and 1,580-km pipeline to Patiala.

It is also looking for participating in a pipeline feeding products into the Vidharba region of Maharashtra and southern Madhya Pradesh, he said.

Reliance plans to spend over Rs 4,500 crore (Rs 45 billion) on a 5,895-km network of six pipelines being built under the "common carrier principle" under which a quarter of the capacity is offered to other companies.

Besides the pipeline to Patiala and Kanpur, shorter ones are proposed to be built to take products to interior areas from the port towns of Goa, Chennai and Kakinada in the south and Haldia port in the east.

BPCL had teamed up with IOC, RIL and Essar Oil for the Central India Pipeline Project that stretched from Gujarat to Gwalior in Madhya Pradesh and Nagpur in Maharashtra.

"But since there are issues in implementation of the project, BPCL is extending the Mumbai-Manmad pipeline up to Indore," he said adding the company still needed a vehicle for tapping Vidharba region of Maharashtra.

RIL has called for expression of interest from parties interested in sharing the 25 per cent excess capacity in the six pipelines by first week of October.

Other companies wanting to share the excess capacity would have to bear the pipeline construction cost in proportion to their interest.

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