NEW DELHI: State-run oil refiners Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have signed a pact with Indian Oil Corporation (IOC) to take 25 per cent stake in the 2,757-km cross-country pipeline, billed as the world’s largest LPG pipeline, to be laid from Kandla in Gujarat to Gorakhpur in Uttar Pradesh at a cost of nearly Rs 10,000 crore.
“IOC, BPCL and HPCL have signed an agreement on June 3, 2019, for the formation of a joint venture company for implementation and subsequent operation of a 2,757-km long LPG pipeline from Kandla, Gujarat, to Gorakhpur, UP,” the firms said in their regulatory filings.
Officials said the project was part of a larger plan to get PSUs to invest heavily in necessary infrastructure. “Such projects are commercially needed, as well as to kick start the slowing economy,” said a petroleum ministry official. India’s GDP growth rate for March quarter of FY19 slowed down to 5.8 per cent from 6.6 per cent in the December the quarter.
According to IOC’s filing, “IndianOil, BPCL and HPCL would have 50 per cent, 25 per cent and 25 per cent equity holding in the JV”.
The pipeline will source LPG supplies from Kandla and other LPG import terminals on the West Coast and two refineries at Koyali in Gujarat and Bina in Madhya Pradesh. It would directly link 22 LPG bottling plants in Gujarat, UP and MP, owned by the three State-run oil firms. It would also feed another 21 LPG bottling plants by using a fleet of trucks. The pipeline would carry up to 6 MT of LPG annually.
Prime Minister Narendra Modi had earlier laid the foundation stone for this pipeline, but lack of funds with IOC was holding up the work on it.