IOC’s new SPM facility hits snag

Kolkata: IndianOil seems to have hit fresh hurdles for commissioning the single-point mooring (SPM) facility at Paradip in Orissa.

While IndianOil is tight lipped about the development, sources told that chances of implementing it before the monsoon sets in this part of the country in approximately a week’s time is slim.

Considering that construction work in the sea is difficult to pursue during the monsoon, missing the June deadline may delay the project by at least three to four months.

Though the pipeline from Paradip to Handia in West Bengal is ready for use, delay in commissioning the SPM will in turn impact IOC’s plan to supply imported crude to Haldia and Barauni refineries through Paradip port at a considerably lower transportation and handling cost.

The project combining both the 330-km Paradip-Haldia pipeline and SPM was originally estimated to cost Rs 1,178 crore and was scheduled to be commissioned in March 2006.

However, the project had hit hurdles on all fronts right from the beginning.

While the pipeline work could be completed last year, IOC replaced the SPM project contractor - Iranian Offshore Engineering and Construction Company (IOEC) – by Oil and Gas Engineering Systems of Australia to pace up project commissioning.

IOC’s delay in commissioning the project, however, brought windfall gains to Haldia Port, currently handling 12-13 million tonne crude imported for both the refineries.

Haldia is estimated to lose 7.5-8 mt liquid cargo to Paradip once the SPM project is implemented.