Cairn India offers to bear cost of transporting crude
28 Mar 2007
New Delhi: Cairn India said it is willing to bear the major part of the cost involved in building a pipeline to transport crude from its Rajasthan fields. With this announcement all uncertainties pertaining to the proposed pipeline to transport the crude from Cairn India's Rajasthan fields, are likely to come to an end.
It is proposed that the pipeline will fall within the definition of the field development activities and will accordingly be funded 70 per cent by Cairn India and 30 per cent by ONGC Cairn India said.
By resolving this issue, Cairn's crude can access domestic refineries. Lack of clarity on commercial issues such as crude evacuation from the fields, crude quality and pricing of the crude were some of the issues that have been adversely affecting the company's performance in the domestic stock market.
Cairn and ONGC plan to lay a 600-km pipeline from Barmer, Rajasthan to the Gujarat coast at an estimated cost of $700-800 million.
The pipeline is proposed to have a connecting point to Indian Oil Corporation's terminal in Gujarat from where the crude can be carried to its Koyali and Panipat refineries.
The
pipeline will take 12-15 months for construction and
will come up around the same time when the Rajasthan
field begins oil production in 2009.
