Cairn India said on Tuesday it has started transporting crude oil from Barmer field in Rajasthan through a new 590 km continuously heated pipeline to its customers, bringing the transportation cost down by almost 85%. State-owned ONGC owns 30% in Cairn India’s Rajasthan block RJ-ON-90/1 that started production last August. According to Cairn India spokesperson, prior to the commissioning of the pipeline, oil was transported to the refineries of Reliance Industries and Mangalore Refinery and Petrochemicals Ltd (MRPL) through trucks and ships, which costed $8-10 a barrel. It has come down to $1.5 a barrel because of the pipeline. Besides, the pipeline also facilitates higher offtake.
Cairn India has started selling crude to Essar’s refinery from Tuesday. It would shortly start selling to Indian Oil Corporation (IOC). Production is currently 60,000 barrels of oil per day (bopd). Cairn has so far sold 5 million barrel of crude from Barmer field. The pipeline will allow significant production growth, a company statement said quoting Cairn India MD Rahul Dhir.
The completion of the pipeline and related infrastructure allows the JV to sell crude to the refineries in order to gradually increase both production and sales.