IOC to buy gas from RIL

The Indian Oil Corporation will soon be buying natural gas from Reliance Industries (RIL) to replace costlier fuels at the Panipat refinery to increase its profits. The IOC is ready with Dadri-Panipat gas pipeline for which natural gas from D6 block in Krishna Godavari (KG) basin, which is being operated by RIL will be made available.

The IOC had planned to convert its feedstock from fossil fuel to natural gas. It was in 2007 that the IOC had been permitted by the Union government to construct a 132-km gas pipeline from Dadri to Panipat at an estimated cost of Rs 350 crore.

The corporation will buy 1.6 million cubic metres of natural gas a day from RIL to replace costlier fuels. The IOC currently uses crude oil or fuel oil for operating the refinery. GAIL gas, a subsidiary of GAIL India, will transport the gas.

According to sources in the refinery, an Empowered Group of Ministers had allocated 5.384 mmcmd of gas from KG-D6 to public and private sector refineries against their demand for 22.8 mmcmd.

IOC had demanded 6.58 mmcmd of gas for its Gujarat, Mathura and Panipat refineries, but as refineries were allocated less than one-fourth of its demand, the state-owned firm was given 1.6 mmcmd.

The official said Panipat refinery will be getting about 0.8 mmcmd a day and the rest will be used at Koyali refinery.

Source: The Tribune, Delhi, Tuesday, 10th August 2010
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