IOC wants high dscounts for Cairn's Barmer crude

12 September 2008

Public sector oil marketing giant Indian Oil today said that it is prerpared to buy up to 2 million tonnes of crude from Cairn India's Rajasthan field at Barmer, but at heavy discounts for the heavy, waxy crude.

Acrding to B N Bankapur, IOC's director (refineries), normal oil pipelines could not transport Rajasthan crude as it solidified at normal temperatures and therefore required to be blended with normal crude for pipeline transportation.

Cairn's Rajasthan crude is a sweet (low sulphur), waxy crude with medium API gravity of 27.41 and its yield produces straight run diesel which meets Euro II quality standards without any further hydro treatment, while its 'vacuum gas oil' for secondary units is said to be of 'excellent' quality with high paraffin content.

Bankapur told reporters in Panipat that normal pipelines could take only 10 per cent of Rajasthan crude. IOC's 12 million tons a year Panipat refinery in Haryana could take only 0.6 million tons and the Koyali refinery in Gujarat could take another 0.8 million tons.

He said Cairn's Rajasthan crude could be processed at refineries which have coker, which Panipat refinery in Haryana and Barauni refinery in Bihar have cokers and the Gujarat refinery would have one by 2009. Depending on the commercial viability, IOC could stretch its consumption to two million tons.

But, processing the Rajasthan crude that has a very high pour point and viscosity with 70-75 per cent heavy ends can only be economically viable only if it came at heavy discounts he said.