CHANGE OF GUARD

New Delhi, June 2: Indian Oil has terminated the $30-million contract with Iranian Offshore Oil Exploration Company to set up an offshore single-point mooring for the Paradeep-Haldia pipeline. Australian company OES will now take over the job.

The Iranian company had failed to meet the project deadline, which was extended from December 2006 to June this year. “The Iranians were not working and we have been forced to take the drastic step as we want oil to start flowing to Haldia by July-end,” a senior Indian Oil official told The Telegraph.

The Australian company has assured Indian Oil that the monsoon would not pose any problem and it would continue to work to meet the July-end deadline. Rains were a major obstacle to the Iranian firm’s activities in the region.

The Australian company has to complete the remaining work of laying the single-point mooring in the deep waters off Paradeep coast and link it to the undersea pipeline.

Indian Oil had initially set a December 2006 deadline for the 350km pipeline project but heavy rains slowed down the work. The company then postponed the scheduled date to March this year. But even this deadline had to be extended to June.

The Rs 1,200-crore pipeline has been laid with a horizontal drilling technique.

An undersea pipeline is believed to safe from floods and terrorist attacks.

The pipeline will help Indian Oil save Rs 500 crore every year in transportation and will boost the profitability of the Haldia, Barauni and Bongaigaon refineries.

At present, crude comes in medium-sized ships to the mouth of the Hooghly from where smaller vessels bring it to Haldia.

This transshipment is a costly affair and has affected the Haldia refinery’s operations. The lower cost of transporting crude will help Indian Oil expand the capacity of its Haldia refinery from 4.6 million tonnes to 6 million tonnes immediately and to 7.5 million tonnes by April 2009.