The alternative pipelines under consideration are from Chennai toSangareddi in Andhra Pradesh via Kurnool, Guntakal and Raichur while theother will link Nagapattinam to Tirunelveli in Tamil Nadu via Thanjavur,Tiruchi, Virudhunagar and Kovilpatti. The plans are still in the preliminarystage and it will take time before a final decision is taken.

The original proposal of Petronet took into consideration the products fromMadras Refineries which will now be evacuated towards Andhra Pradesh. IOChas planned a nine million tonne refinery in Nagapattinam while NagarjunaOil will commission a six million tonne facility in Cuddalore. The productsfrom these two facilities are adequate for the Tamil Nadu region, sourcessay, while Andhra Pradesh will be better off with supply from MRL.

All this is, of course, subject to these new refineries going on streamduring the next five years. Present indications are that Nagarjuna Oil isgoing ahead with its plans in right earnest and has already kicked off talkswith Caltex of the US and IOC for an equity stake in the project. Theoriginal Petronet pipeline proposal from Chennai to Madurai was due to beexecuted only by 2004-05.

The other network in the south from Cochin to Karur (Petronet-CCK) will beimplemented as planned. Bharat Petroleum Corporation and Cochin Refineries(CRL) will take up 49 per cent in the project with Petronet accounting for26 per cent. The pipeline will move products from CRL whose capacity isplanned to be enhanced from 10.5 million tonnes to 13.5 million tonnes.

Experts say that Andhra Pradesh would do well with an increased supply ofpetro-products via pipelines so that transport costs are kept in check.Apart from the revised Petronet proposal, product movement will also takeplace through Hindustan Petroleum Corporation's Vizag-Vijayawada-Hyderabadpipeline as also the branch network planned by Reliance Petroleum fromNagpur to Hyderabad in its Central India pipeline (CIPL).

The Chennai-Tiruchi-Madurai pipeline involved equity participation from IOCand MRL to the extent of 49 per cent while Petronet would take up 26 percent. Once the two new networks are in place, IOC and Nagarjuna Oil arelikely to take 26 per cent each in the revised Tamil Nadu stretch while MRLand Petronet will be the major stakeholders for the route to AndhraPradesh.

There is a strong possibility of BPCL stepping into the picture followingits recent marketing pact with MRL.

Sources have also hinted that IOC could insist on constructing one of thepipelines on its own to save on time and cost over-runs. The oil PSU, it maybe recalled, is of the view that there is little point routing proposalsthrough Petronet when it has the financial strength, expertise andflexibility to execute pipeline projects on its own. The eventual objectiveis to allow oil companies to go-ahead with their plans so that these do notconflict directly with those of Petronet.