Big Indian pipe-line contract chased

Press, 19 May 1984, Page 25

Big Indian pipe-line contract chased

PA New Delhi India, eager to stop a colossal waste of petroleum gas, has started a race among international engineering firms to build a giant $1.7 billion gas pipe-line.

Construction Arms from countries that include Italy, Japan, Canada and France are wooing the Indian Government with attractive finance for the project, said Government officials.

The pipe-line will pump gas from two offshore oil and gas fields on the west coast to large fertiliser plants that will be built in the northern states of Uttar Pradesh and Rajasthan, and in Madhya Pradesh in central India.

The gas is being burnt off at present. “India flares more than 6.4 million cu. m. of gas a day. Supplies of gas to the six fertiliser plants, each designed to produce 1350 tonnes of ammonia a day. will help to use this surplus gas," said a Petroleum Ministry official. India produces 16 million cu. m. of gas a day, but less than 10 million is used commercially. The Indian Government recently approved plans for the 1700 km pipe-line. It will run from an offshore gas pumping station in Hazira. in Western Gujarat state, near the Bombay High and South Bassein oil and gas fields, to Babrala, about

90km from Delhi. The Government then invited tenders for the supply and laying of the pipes, which will cut across sultry plains in Gujarat, deserts in Rajasthan, ravines in Madhya Pradesli and lush farmland in western Uttar Pradesh.

“The project will be a challenge to engineering skill,” said the Petroleum Ministry official, adding that bandits operate in the Madhya Pradesh section of the route.

Construction of the pipeline is due to start next January, with the first part to be commissioned by mid--1986 and completion by October, 1988, he said.

Among the international firms bidding for the project is the state-owned Italian company, Ente Nazionale Idrocarburi (E.N.1.). which has helped build big pipe-lines in India since it came to the country in the late 19505.

Industry sources said E.N.I. had proposed forming a consortium to build the pipe-line, comprising E.N.l.'s subsidiary, Snamprogetti S.P.A., C. Itoh. of Japan, Majestic Wiley, of Canada, and some Indian companies. The consortium had offered to complete the project within two years, the sources said.

A group of Japanese companies, led by Toyo Engin-

eering, Ltd, is in keen competition with E.N.I.

Firms from France. Britain. United States, Poland and Czechoslovakia are also in the running, either for supplying pipes or for building part of the pipe-line.

India not only lacks modern pipe-laying technology, it also needs credit on easy terms to overcome a shortfall in concessional aid from world bodies and Western countries.

The Italian Government has already offered $7OO million in aid and export credits to finance foreign exchange costs. E.N.I. has said its consortium would arrange to fund local costs, estimated at SUSI billion, industry sources said.

Italy’s Foreign Trade Minister. Mr Capria, recently visited India and discussed the project with Indian officials.

The Japanese Prime Minister. Mr Nakasone, was expected to assist the Japanese group’s bid with offers of aid and technology during his four-day official visit to India earlier this month.

The project's main consultant, the state-owned engineers. India. Ltd, has appointed Gas-Unie, of the Netherlands, as a back-up consultant.