SAIL sources said the steel major had also taken up an aggressive marketing strategy to capture orders from water supply projects.

As per Petronet order, SAIL's Rourkela Steel Plant (RSP) will supply 109 km of specialty pipes of 20 inches diameter weighing around 8,600 tonnes in grade API 5Lx60 as per the stringent specifications of American Petroleum Institute.

These pipes would be used for the Mangalore-Hassan-Bangalore product pipeline. Although RSP has been supplying pipes regularly for pipeline projects for oil and gas, this is for the first time that it would be supplying pipes to projects under Petronet, said a senior SAIL official.

Mumbai-based Petronet was incorporated on May 26, 1997 to undertake construction and operation of pipelines for petroleum products.

The official said the order makes a breakthrough for SAIL's helically-welded pipes in a market where longitudinally-welded (LW) pipes have traditionally been preferred. RSP's spirally welded pipe plant produces helically-welded pipes.

IOC has no preference for LW pipes, some of the other companies engaged in oil pipeline construction have shown a marked preference for LW pipes. However, such pipes are not available in diameters beyond 40 inches.

With the production of high quality pipes, RSP is generally catering to the higher end of the market with the objective of higher returns. However, this has also created some problems, the official admitted.

While producing superior quality pipes there is an arising in ordinary quality pipes. These pipes are ideally suited for water and sewerage disposal purposes and are also available at prices much lower than normal supplies, he said.

He believes that water supply projects in the offing can plan for utilisation of such pipes and save substantial amounts of money. Specific sizes are virtually available off the shelf.

However, as the water supply projects are generally undertaken by the state governments, they overlook the price gains when such materials are available through tendering and go in for their own advertising and bidding as per their own sizes and specifications, a senior pipeline engineer pointed out.

"State government organisations, which are eternally short of development funds, should do some cost benefit analysis before blindly following the trodden path. This could be enormous financial benefit to them," he said.