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IOC, BPCL to sign pact for GAILs Vizag-Secunderabad pipeline
New Delhi, Nov 27: Indian Oil (IOC) and Bharat Petroleum Corp Ltd (BPCL) will sign an agreement with Gail (India) for utilising its Visakhapatnam-Secundrabad LPG pipeline for transporting the cooking fuel in Andhra Pradesh.
New Delhi, Nov 27: Indian Oil (IOC) and Bharat Petroleum Corp Ltd (BPCL) will sign an agreement with Gail (India) for utilising its Visakhapatnam-Secundrabad LPG pipeline for transporting the cooking fuel in Andhra Pradesh.
The transport service agreement (TSA) is likely to be
signed for a period of five years with take-or-pay clause.
The TSA would, however, have a provision that the take-or-pay liability would not be invoked until the validity of the TSA or the commissioning of the HPCL-total's cavern storage facility at Vizag, whichever is earlier, sources said.
That is because the commitment sought in the TSA for initial years is for small volumes (IOC & HPC 0.224 million tonne and BPCL at 0.12 million tonne in 2003-04). After that, IOC, BPCL and HPCL may review the Tsa afresh on commercial consideration and decide whether the take or pay clause be retained or not, sources said adding that during such time, the three state-run firms would use the pipeline on a best endeavor basis in LPG transportation.
Both IOC and BPCL would provide the line-fill quantity for the pipeline on top priority.
While HPCL had already signed the TSA with a take or pay clause, the same could not be signed with IOC and BPCL as they did not agree to the inclusion of the clause. Sources said IOC and BPCL had insisted on a tripartite agreement between oil marketing companies, GAIL and HPCL-total since there was no adequate storage at Vizag port for LPG imports to ensure continuous product availability.
HPCL-totals planned cavern storage facility would provide the LPG receipt/storage facility.
Bureau Report
The TSA would, however, have a provision that the take-or-pay liability would not be invoked until the validity of the TSA or the commissioning of the HPCL-total's cavern storage facility at Vizag, whichever is earlier, sources said.
That is because the commitment sought in the TSA for initial years is for small volumes (IOC & HPC 0.224 million tonne and BPCL at 0.12 million tonne in 2003-04). After that, IOC, BPCL and HPCL may review the Tsa afresh on commercial consideration and decide whether the take or pay clause be retained or not, sources said adding that during such time, the three state-run firms would use the pipeline on a best endeavor basis in LPG transportation.
Both IOC and BPCL would provide the line-fill quantity for the pipeline on top priority.
While HPCL had already signed the TSA with a take or pay clause, the same could not be signed with IOC and BPCL as they did not agree to the inclusion of the clause. Sources said IOC and BPCL had insisted on a tripartite agreement between oil marketing companies, GAIL and HPCL-total since there was no adequate storage at Vizag port for LPG imports to ensure continuous product availability.
HPCL-totals planned cavern storage facility would provide the LPG receipt/storage facility.
Bureau Report