Mumbai, Feb 15: The 3-million-tonne Numaligarh refinery, due for commissioning in Assam in December, is likely to cater to Bangladesh's requirements for petro-products. The government is seriously considering the idea as it makes a lot of economic sense to both countries.Though the proposal is still being evaluated, top sources in New Delhi said that it stood a very good chance of acceptance as it would mean substantial savings for both India and Bangladesh. ``If the two governments, in principle, agree to this arrangement, it would mean a big step forward in exports of petroleum products from India,'' they added.
The idea being thrashed out is to use barges to carry the finished product from Numaligarh to Bangladesh which actually works out to be a very reasonable distance as against transporting it within India. This immediately translates into a saving on freight charges and would also boost the revenue potential of the refinery. It is still not clear if outright sale of petro-products is the onlyoption the government is looking at. Sources say the crude meant for Bangladesh could, instead, be diverted to India at any of its ports, be it Haldia or Paradip. The other alternative is to swap natural gas, which Bangladesh has in surplus.
The only obstacle with this option is that a pipeline needs to be built for transporting natural gas from Bangladesh to a strategic part of India like Andhra Pradesh, for instance, which would stand to benefit directly. This is not only expensive but would be an elaborate procedure right from inviting tenders to awarding the contract. The fear of more red-tapism may dissuade the two countries from even considering the natural gas alternative. If the proposal to sell crude materialises, the need for a product pipeline can be safely ruled out. In fact, the joint venture pipelines company, Petronet India was considering a massive, complicated network from Numaligarh to Barauni via Jorhat, Guwahati, Bongaiagaon and New Jalpaiguri. As sources say, the whole idea of thispipeline was based on strategic, and not economic, reasons.
The Numaligarh refinery's capacity can be expanded to even six million tonnes and, if things work out as planned, the facility could serve as a direct source to Bangladesh and, possibly, Myanamar if this is found to be a feasible option.
The Numaligarh refinery's capacity can be expanded to even six million tonnes and, if things work out as planned, the facility could serve as a direct source to Bangladesh and, possibly, Myanamar if this is found to be a feasible option. The northeast, which is rich in oil reserves, can eventually serve as the nodal point for exports.
The main promoters of the Numaligarh refinery are Bharat Petroleum Corporation with 32 per cent, IBP with 19 per cent and the government of Assam which holds 10 per cent. The cost of the project, according to the latest report of the ministry of petroleum and natural gas is around Rs 2,500 crore. The lastest budget provided for an allocation of Rs 100 crore from the centrealso.
Oil India was tipped to pick a ten per cent stake in the project but has, reportedly, not come to a decision yet. Company officials had stated that it would make more sense to participate in the equity of the project if capacity were to be doubled to six million tonnes. This, they added, would hold the refinery in good stead in a completely deregulated scenario. Pakistan pipeline plan
While the modalities of supplying petro-products to Bangladesh from the Numaligarh refinery are under evaluation, another interesting proposal concerns exports to Pakistan also.
This time, the route adopted will emanate from Hindustan Petroleum Corporation's nine million tonne refinery at Bhatinda in a tie-up with Saudi Aramco.
The facility is scheduled to be operational by 2001. Transport by a product pipeline will be the most rational solution and the present network being evaluated by Petronet India involves a route from Bhatinda to Udhampur via Jalandhar, Pathankot and Jammu. If this can be extended tosome strategic parts in Pakistan, it will mark a progressive step towards exports of petro-products from India.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
