New Delhi: Government has approved Cairn India’s proposal to lay a pipeline from Barmer district of Rajasthan to Gujarat coast for transporting crude oil it had discovered in the desert state.
Petroleum Minister Murli Deora signed the papers on 22 August permitting Cairn to acquire land rights for laying the 582-km pipeline from Barmer to Salaya, official sources said.
Deora’s approval for Right of Use of the pipeline paves way for the project at an expenditure of $700 million (Rs2,875 crore), to be included as part of Rajasthan field development cost, which Cairn is entitled to recover before sharing profits with the government.
Almost simultaneously to the pipeline’s inclusion in the field development plan would come the approval for selling the crude oil to multiple refiners instead of previously approved scheme, in which entire 1,50,000 barrels per day (7.5 million tonne) output was to be supplied to Mangalore Refinery.
“Deora’s role in the Rajasthan project ceases to exit once the RoU application was approved. Now, it is for Petroleum Ministry officials to issue notifications and give the remaining approvals at the earliest so that plans for starting production from Rajasthan fields by first half of 2009 are not impacted,” a source said.
The pipeline, which was necessitated after Mangalore Refinery-the official offtaker of Rajasthan crude - said it could take only 1.2 million tonne of crude, will take minimum 18 months to complete. The rest of the crude will be shipped from a Gujarat port to refiners on east and west coasts. Cairn, sources said, faced a tight implementation schedule as the pipeline approval came after considerable delay.