State-owned oil refiner, Indian Oil Corporation (IOC) would invest around Rs 6,500 crore in order to raise its pipeline network to more than 13,000-KM by March 2012.

Moreover, the company has also decided to finish up its primary gas pipeline by the end of existing year (Dec 2008). 

Mr. P.K. Chakraborti, Director-Pipelines, stated that the whole pipeline project will be funded through a debt-equity ratio of 1:1. 

“The money will come either from our borrowings or the money from the oil bonds,” Mr. P.K. Chakraborti said. 

The company would add around 1,150 km to its 9,273-km network by 2008 end. 

“This will involve an investment of Rs 2,500 crore,” he added. 

“Once the entire network is in place, the total transmitting capacity of IOC will go up to 86 million metric tonnes per annum (mmtpa). By the end of this year, the company will augment its capacity by 10 mmtpa, and another 13 mmtpa will be added in the remaining years under the XIth Five-Year Plan," Mr. Chakraborti said. 

Mr. Sarthak Behuria, Chairman, IOC, said the company considers gas pipelines as a high-growth segment. 

The 133-km gas pipeline from Dadri to Panipat will involve a total investment of around Rs 298 crore. After completion, it will have a total capacity to transmit 10.5 million metric standard cubic per metres of gas daily. 

The gas will be utilized to drive the turbines and for the forthcoming naphtha cracker at Panipat. 

“Since sourcing is a problem, we will initially source 1.5 mmscmd of gas for our Panipat project and, as and when the supply increases, we will start selling it commercially,” Mr. Chakraborti said. 

A 275-km LPG pipeline from Panipat to Jalandhar is likely to be finished by the existing fiscal. 

The company’s existing network consists of product pipelines of 5,300 km, whereas the remaining are crude oil pipelines. The network attained a 10.5% increase in output at 21.27 million metric tonnes during the last fiscal (2007-08). 

Major product pipelines under execution include Chennai-Bangalore and Koyali-Ratlam pipelines.

Shares of the company, on Friday (Sep 19), ended the week at Rs 396.90, down 1.8%, on the BSE. The share price has seen a 52-week high of Rs 809.90 and a low of Rs 303 on BSE.