Unconfirmed reports indicated that Petronet India would hold 51 per cent, RPL 26 per cent and Essar Oil 13 per cent while the balance would be taken up by a reputed financial institution (FI). The stakes of the two private companies have been computed based roughly on their individual refining capacities.

RPL, it may be recalled, will commission a refinery with a capacity of 21.5 million tonnes while Essar's project to go onstream next year is being planned at 10.5 million tonnes. The products from the two refineries will form a major part of the input for CIPL and, therefore, the Government thinks it fit to allot stakes to them instead of the three oilPSUs.

"The oil PSUs have nothing to lose by not participating in the equity of CIPL. The holding company, Petronet, will actually represent their interests with a 51 per cent stake and this is an important point as it holds only 26 per cent in other pipeline projects," sources said. These include the networks planned from Vadinar to Kandla and from Cochin to Karur where, along with Petronet, IOC and BPCL hold 26 per cent of the equity.

However, IOC was of the opinion that it was legitimate in claiming a 26 per cent stake as the pipeline would also have to evacuate products from its refinery in Koyali, Gujarat. The Fortune 500 company also argued that the equity structure could be so modified that 26 per cent could be held individually by itself, RPL and Petronet.

The CIPL network will begin from Jamnagar and reach Koyali where a new product storage terminal of IOC's Gujarat refinery is being planned. Rajkot is proposed to be an intermediate delivery point en route.

The products of the Gujarat refinerywill be injected into the system at Koyali. The provision of connecting CIPL with IOC's Koyali-Ahmedabad and Koyali-Navagam pipelines at Koyali has also been made for flexibility in the supply source.

From Koyali, the pipeline will extend to Ratlam where it will be bifurcated into two networks. The northern trunk pipeline will go to Kota and terminate at Gwalior while a 180-kilometre branch pipeline is planned from the Ratlam-Kota section.

The other network, the southern trunk pipeline, will pass through Itarsi and thereon to Nagpur. It shall either be terminated here or be extended up to Hyderabad depending upon the viability of the Nagpur-Hyderabad section. Branch pipelines are planned for Indore and Bhopal from the Ratlam-Itarsi section.

In October last year, RPL submitted its pipeline plan which involved constructing a 550-km network from Jamanagar to Indore via Ahmedabad. In the second phase, the company planned to extend this from Indore to Hyderabad via Bhopal and Nagpur. Two branch pipelineswere also part of the proposal -- one from Ahmedabad to Patna via Udaipur, Kota, Gwalior, Kanpur and Allahabad and the other from Ahmedabad to Hazira.

Petronet objected to the plan in a communique to the petroleum ministry as the project was planned by RPL on its own unlike others which came under the Petronet umbrella. The apprehension then was that oil PSUs would also build pipelines on their own without routing them through Petronet. The other problem was that the RPL plan could even jeopardise some projects of Petronet like Koyali-Ratlam, Bina-Jhansi-Kanpur and Paradip-Rourkela-Ranchi-Allahabad.

While the issue was being sorted out, Essar Oil submitted a proposal for a pipeline from Jamnagar to Ahmedabad and thereon to Meerut via Ratlam, Kota and Faridabad. A spurline was also planned from Kota to Jhansi, Kanpur and Allahabad. A committee was set up to examine these projects as also those planned by Petronet and it was decided that while finalising the modified CIPL, the northern branch wouldterminate at Gwalior.