Reliance Industries has sought access to the India's longest LPG pipeline that Indian Oil Corporation (IOC) is laying from Gujarat to Gorakhpur in eastern Uttar Pradesh to cater to the growing demand for cooking gas in the country. IOC plans to import LPG at Kandla in Gujarat and move it through the 1,987 kilometer pipeline to Gorakhpur via Ahmedabad (in Gujarat), Ujjain, Bhopal (in Madhya Pradesh), Kanpur, Allahabad, Varanasi and Lucknow (in Uttar Pradesh).
In comments on IOC proposal made to oil regulator PNGRB, RILBSE 0.30 % said it is "interested in meeting its own demand in the geographical areas that is serviced by this pipeline and seeks capacity access in the pipeline." RIL said it wants to put in its own LPG, possibly produced at its Jamangar refineries in Gujarat, in the pipeline for transportation to hinterland. The pipeline will carry 3.75 million tons per annum of LPG, IOC said in an application to the sector regulator PNGRB seeking approval for laying the pipeline. Of this, 25 per cent will be common carrier capacity that can be provided to third parties.
"As you are aware the Government is keen on rural penetration of LPG due to health, safety and environment (HSE) imperatives. RIL has been marketing (LPG) only in rural areas and would compete in predominantly rural areas serviced by this pipeline. Besides getting right to move its own LPG through the pipeline, RIL also wanted third party access to storages IOC will build along the pipeline route for stocking the gas before sent to bottling plants for filling in cylinders for sale to consumers.
RIL said assistance at the allied storages proposed en route is vital for it to compete and rural penetration. "Since the facilities of storage also fall within the definition of 'Petroleum & Petroleum Products Pipeline. we request that you declare all the facilities and the pipelines as 'common carrier'," RIL said in the letter to PNGRB. If needed, IOC should also provide facility for loading bulk trucks, cost of which can be recovered in pipeline transportation tariffs.
The company, which owns refining capacity of 62 million tons, said aggregation of demand will help avoid in fructuous investment in the parallel pipeline, bringing down the cost of transportation.
Access to RIL will also enhance rural penetration, one of the policy imperatives of the Government," it added. IOC plans to feed LPG into the pipeline at Kandla port as well as its Koyali refinery in Gujarat. It will connect eight of IOC's LPG bottling plants in Central and Northern India. This will be the biggest LPG pipeline in the country. GAIL currently operates a 1,415-km line from Jamnagar in Gujarat to Loni near here. The line carries 2.5 million tons of LPG annually.