The present equity arrangement for the project involves HPCL and MRPL taking 13 per cent each while Petronet will account for a 26 per cent stake. Interestingly, the Indian Oil Corporation has already agreed in-principle to pick up 26 per cent.

The RPL offer has taken observers by surprise as the company is in the process of evacuating the products of its 27-million-tonne refinery through the Vadinar-Kandla pipeline and thereon via the Kandla-Bhatinda network.

RPL, along with IOC and Petronet, also plans to build the mega Rs 4,400 crore Central India pipeline (CIPL) from its Jamnagar facility to Gwalior."It is still difficult to understand why RPL should be interested in participating in the equity of MBPL unless it plans to move products from Kandla toMangalore for further evacuation," experts say. The network has been planned to carry MRPL's output as well as imports from Mangalore port. These could be done away with by substituting products from the RPL refinery instead.

The initial equity pattern of MBPL comprised HPCL, MRPL and Petronet taking 26 per cent apiece while the balance would be offloaded to strategic and financial investors. Subsequently, HPCL and MRPL decided to pare their stakes to 13 per cent each going by a theory that the combined holding by oil companies in a Petronet subsidiary should be confined to 26 per cent.

This, incidentally, is threatening to snowball into a major controversy especially in the backdrop of IOC and RPL keen on a stake in MBPL."It is now up to the Petronet board to reach a decision on the matter. Technically, there is no reason why several oil companies should not participate in the equity of a pipeline so long as the PSU component is restricted to 50 per cent," experts say.

In the case of MBPL, even if IOCwere to take a 26 per cent stake, the combined PSU holding will be 39 per cent (13 per cent of HPCL) even while MRPL and, possibly, RPL will jointly account for 23 per cent. This also holds good for the Cochin-Karur pipeline where Bharat Petroleum Corporation and Cochin Refineries hold 26 per cent and 23 per cent each as also the Chennai-Tiruchi-Madurai network where IOC and Madras Refineries will jointly account for 49 per cent.

HPCL, in any case, has made it known that it is not too pleased with the IOC offer and with RPL also stepping into the picture, there is bound to be an endless round of debates in the days to come.

IOC has, incidentally, made it clear that its participation in the project would depend on a clear definition of its role vis-a-vis HPCL, which is the lead manager, as well as a board representation in the joint venture. This will hold good for RPL also. Experts say that it makes enormous sense for these two companies to be equity holders in MBPL as the pipeline will ease thr trafficon the Kandla-Bhatinda network.

IOC also has sufficient expertise in pipeline management and would therefore be an ideal support for the project, observers say. The Fortune 500 company has terminals at vital points along MBPL which would be of great help as regards the product distribution pattern.

MBPL will be 364 km long and designed for a final throughput of 8.5 million tonnes. However, other facilities like a pumping system and loading facilities are currently designed for a throughput of 5.6 million tonnes. The pipeline will transport motor spirit, superior kerosene oil, high speed diesel, aviation turbine fuel and naphtha from MRPL. It will cater to the consumption zones of Karnataka and Andhra Pradesh.