Home / Industry / Energy /  Oil companies want to lay pipelines along railway tracks

Mumbai: Tired of the tardy progress in setting up pipelines to transport crude, petroleum products and gas in the country, Indian Oil Corp. Ltd (IOC), India’s biggest oil marketer, has proposed laying pipelines along railway tracks across the country.

The company, on behalf of the oil marketing and exploration and production companies, has submitted a report to the oil ministry, requesting the government to rope in the Indian Railways and allow it to free up the land along railways tracks for setting up a pipeline network.

“We have proposed a revenue sharing model under which both the railways and the oil companies can benefit from the scheme. The idea is to use the railways land for a fees and use the land to lay the pipelines," said U.K. Dhoot, general manager of project monitoring at Indian Oil.

At an oil and gas conference organised by India-Tech Foundation, Dhoot said Indian Oil has a pipeline network of 12,000km across the country sourcing crude and supplying petroleum products to and from its 11 refineries which together have a capacity of 65 million tonnes per annum (mtpa), but has the capacity to transport only 36.6 mtpa.

However, he expressed concern that there could be some conflict of interest issues with Indian Railways as the railways have a substantial share of transport of petroleum products for the oil marketing companies—Indian Oil, Bharat Petroleum Corp. Ltd (BPCL), and Hindustan Petroleum Corp. Ltd (HPCL).

“This is an important issue and we have requested the government to bring out a conducive policy which is a win-win for both as India’s pipeline network for crude sourcing or supplying of petroleum products are very less," he said.

According to the Petroleum Planning and Analysis Cell (PPAC), a statistical body under the petroleum ministry, India consumes up to 220 million tonnes of crude annually and processes it to produce an equal amount of petroleum products such as petrol, diesel, kerosene, fuel oil and lubricants.

So India needs a total of 440 million tonnes of pipeline transportation capacity. Out of this, between the three oil marketing companies and the three main crude supplying companies—Oil and Natural Gas Corp. Ltd (ONGC), Oil India Ltd and Cairn India Ltd—the total existing pipeline capacity stands at 215 million tonnes per annum (mtpa).

In terms of length of the pipeline, India has 9,460km of crude oil pipelines and 14,083 kilometre of product pipeline.

The shortfall in pipeline capacity is met almost equally by roadways, railways and the coastal shipping network, but the ramp-up does not match the rate at which India’s demand for petroleum products and crude oil is increasing.

I. Srinivas Rao, executive director of gas at Bharat Petroleum, said: “Pipelines are lifelines for gas. Without a robust pipeline network, it will be difficult for having a proper gas supply network."

According to the vision document of the Petroleum and Natural Gas Regulatory Board, which monitors and promotes natural gas transmission and distribution, India will have to double its transportation capacity of gas pipelines from 206 million standard cubic metres per day (mscmd) to 415 mscmd by March 2017.

This means India will have to add another 15,918km of pipelines by the end of 12th five-year plan in March 2017.

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