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South beckons oil companies

New Delhi, Aug. 2: With the board of directors of Indian Oil Corporation giving the go-ahead to the 680 km Chennai-Trichy-Madurai pipeline, the national oil major is all set to strengthen its presence in the south. The Rs 380 crore project is expected to be completed in 13 months.

This will be the IOCís first pipeline project in the south and will help evacuate the products of the Chennai refinery which the company acquired recently. The pipeline will give a fillip to IOC's marketing network in the south and will enable IOC to expand the capacity of the Chennai refinery to 9.5 million tonnes.

The Chennai-Trichy-Madurai pipeline project was initially undertaken by Petronet which is a consortium of oil companies. However, the project was delayed as Petronet could not raise the finances. Financial institutions were not providing the loans for the Rs 538 crore project.

IOC has introduced some changes in the project and scaled down the cost to Rs 380 crore. The Fortune 500 company has reduced the diametre of the pipeline and increased its length from the 526 km that Petronet was planning to 680 km. The pipeline will have a tap-off point midway at Sankari from where a branch pipeline will go to Salem which is a high-demand area for petro goods. This additional demand is expected to further improve the economics of the pipeline as compared to the earlier project.

A senior official told The Telegraph, ďThe new pipeline will ensure the swift and safe delivery of petroleum products to consumption centres spread over a wide area, which in turn will enable IOC to increase the capacity of the Chennai refinery from 6.5 million tonnes at present to 9.5 million tonnes.''

IOCís pipeline projects are concentrated in the western and northern parts of the country. The Chennai-Trichy -Madurai project will help to strengthen the pan-Indian presence.

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