Fuel retailers, including state-owned Indian Oil Corp Ltd and private sector giant Reliance Industries Ltd, are likely to bid for building and operating a jet fuel pipeline for the upcoming 160-bln-rupee Navi Mumbai airport, sources with direct knowledge of the matter told Cogencis.
Privatisation-bound Bharat Petroleum Corp Ltd is also seen as a frontrunner for the project to build and operate the 15-km pipeline with a capacity of 2 mtpa to connect Navi Mumbai International Airport with the Jawaharlal Nehru Port Trust.
Petroleum and Natural Gas Regulatory Board had invited bids for the pipeline in September after IMC Ltd, which is in the business of liquid bulk and dry cargo port-based terminals, initiated the proposal for an aviation turbine fuel pipeline for the new airport. The last date of submitting bids for the project is Jan 8.
“On an average per kilometre of ATF pipeline cost around Rs 5 crore (50 mln rupees),” said an official with a prospective bidder. “Based on that thumb rule, this pipeline may cost around 75-100 crore rupees (750 mln–1 bln rupees).
A major reason why companies are keen on this pipeline is that the awardee is bound to get an upper hand in jet fuel sales at the Navi Mumbai airport, said an official.
The Navi Mumbai International Airport wants four ATF pipelines, but the PNGRB has invited bids for one for the time being, based on the proposal it received and consultations with stakeholders. The regulator will examine the requirement of additional pipelines if it receives proposals for the same in future.
The three public sector fuel retailers together control over 90% of the jet fuel market in India. IOC is country’s largest jet fuel retailer with a market share of 65%, followed by BPCL with 20% share and Hindustan Petroleum Corp Ltd with a market share of 10%, as per latest available sales data. The remaining is with players such as RIL, Shell, Mangalore Refinery and Petrochemicals Ltd.
Source: Cogenics
