The environment obstacle relates to a 17-kilometre sub-sea onshore pipeline connecting the single point mooring (SPM) at Vadinar, Gujarat, to the crude-oil terminal. While reasons for the objections are not known, the problem has been hanging fire for several months now. There is also no indication when the ministry will give its okay to what observers term "a relatively hassle-free issue."

It is also feared that if the impasse continues, Oman Oil Company, the co-promoter of the project, may even consider pulling out of the venture. If that happens, it would be very difficult for partner, Bharat Petroleum Corporation, to scout around for alternatives as it would be tantamount to starting from scratch all over again.

The project was approved bycabinet more than three years now and was scheduled to have been commissioned by the turn of the century. Now, with the present pace of progress, it is unlikely if it will be on stream by the end of the Ninth Plan in 2002.

Sources say the location of the SPM and crude-oil terminal cannot be altered now as it is too late in the day. Further, all plans for the Rs 7,500-crore project have been made based on this arrangement. The crude will be received at the terminal by a pipeline from the SPM and thereafter transported by a 940km cross-country pipeline from Vadinar to Bina via Jhansi.

Construction of this long network is the responsibility of Petronet India (PIL), the joint venture pipelines company, floated in May last. While BPCL and PIL will hold 26 per cent each of the equity in the pipeline, a similar stake will be offered to Bharat Oman Refinery (BORL), the joint venture company implementing the project.

The SPM, which is a crucial link to the refinery, is proposed to be located 11 kilometres offthe Vadinar coast in Gujarat maritime board (GMB) administrative territorial waters. It will be a catenary anchor leg-mooring (CALM) buoy type which will receive crude from very large carriers of up to 2,73,000 deadweight tonnage.

The crude will be received at the terminal through the sub-sea pipeline, the perceived environmental hurdle.

The terminal, in turn, is located 200 metres away from Indian Oil Corporation's crude storage terminal at Vadinar. The advantages of the SPM location, experts say, are a calm sea without any need for dredging.

With all this carefully planned by the promoters of the refinery, sources say it will be virtually impossible to contemplate relocating the SPM for want of environmental clearance. The cost of the project has, in any case, over the last three years jumped by nearly Rs 2,000 crore and is threatening to get out of hand if a quick solution is not found.

The Bina site has many locational advantages, say experts. It is surrounded by high consumption zones/demandcentres of petroleum products. Considering that a substantial portion of future demand of products will be met from imported sources, the refinery will enjoy a freight advantage over transporting products from coastal locations.

Transportation of products will need different pipelines for different products, whereas it would be cost-effective to carry crude and refine it near the demand region. The site is well connected by rail or road network and is not near any environmentally-sensitive areas like forests, wild-life sanctuaries and national monuments. The source of water is the Betwa river which is 5km from the site.

The Bina refinery will be supported by three linked projects - a marketing terminal being set up by BPCL to distribute the products of the refinery; a power project based on residual fuel supplied by the refinery being set up by a company promoted by Hindustan Development Corporation which will supply power and steam to the refiery; and a product pipeline from Bina to Kanpur.

PromotersBPCL and the Oman Oil Company have also given in-principle approval to offering a stake in the project to the Oil and Natural Gas Corporation. However, no decision has been taken by the ONGC yet.