The operator of the largest liquid hydrocarbon pipeline network in the country submitted an ‘expression of interest’ to the downstream regulator, the Petroleum and Natural Gas Regulatory Board, to lay, build and operate a common carrier LPG pipeline. Following this, the board has begun a public consultation on the matter.

 

The pipeline could cost Rs 5,000-6,000 crore to build, according to industry executives.

 

In the first five months of the current financial year, India’s LPG consumption grew 10.5% over that a year ago, a rate that’s likely to sustain as the government aims to expand cooking gas consumer base 60% in three years. Of the 8.4 million metric tonnes consumed between April and August, just a little more than half was produced locally. The expected growth in local demand will, therefore, increase India’s dependence on import.

 

“The deficit between indigenous supply and demand of LPG linked to IOCL’s bottling plants is expected to reach a level of about 10 mmtpa (million metric tonnes per annum) by 2031-32. Considering the aforementioned deficit figures for LPG, it is essential to import LPG at the nearest port and then transport it to the bottling plants through the most economical modes,” the company said in its ‘expression of interest’.

 

It further said, “Additional import capacities are being built at Paradip, Cochin, Kandla etc to meet the increasing requirement of imports. West coast remains the most suitable to import LPG to meet the demand of North and Central India.”

 

The company plans to raise the capacity of its LPG import terminal at Kandla to 5 mmtpa from the current 1.5 mmtpa.

 

The proposed pipeline comprising 1,841 km of mainline and 146 km branch lines to Ujjain and Varanasi will have a carrying capacity of 3.75 mmtpa. The pipeline will have intermediate pump stations at Koyali refinery and at Indore. It will deliver LPG to bottling plants at Ahmedabad, Ujjain, Bhopal, Kanpur, Allahabad, Varanasi, Lucknow and Gorakhpur.

 

The proposed pipeline will also draw fuel from Gujarat refinery and connect the company’s eight LPG bottling plants whose capacities are also planned to be raised. Indian OilBSE -1.35 % Corporation currently operates and maintains nearly 12,000 km of hydrocarbon pipelines.

 

The company caters to nearly half of the country’s 18 crore LPG consumers. Indian Oil, Hindustan PetroleumBSE -0.28 % and Bharat PetroleumBSE -0.82 % together operate about 188 LPG bottling plants with a bottling capacity of about 15.2 mmtpa. State firms sold nearly 17.2 million tonnes of LPG in 2015-16.