Cairn pipeline project gets ECS nod

New Delhi: The Empowered Committee of Secretaries (ECS) has approved Cairn India’s proposal to lay $800 million pipeline for transporting oil from its Rajasthan fields and recovering the cost through sale of crude.

The empowered committee, which met on Monday, to consider shifting the delivery point of crude oil from the field in Barmer, Rajasthan to Salaya, Gujarat, has cleared the plan.A senior Petroleum Ministry official told Business Line that “the proposal has been approved. However, certain details are yet to be worked out.”

Cairn and ONGC (30 per cent stakeholder) will lay a 585-km pipeline to the new sale point and include this cost in the field development cost that is recoverable from sale of oil. The ESC recommendation would be put before the Petroleum Minister, Mr Murli Deora, for approval.

“We will wait until we have final confirmation from the Ministry. The major construction contracts for both the pipeline and upstream developments have already been awarded to key Indian companies. We remain committed to producing oil from Rajasthan in the second half of 2009,” a Cairn official said.

The need for a pipeline came when the official nominee to offtake the Rajasthan crude, Mangalore Refinery & Petrochemicals Ltd (MRPL), said it can take only 1-1.2 million tonne out of the 7.5 million tonne output planned from the field.