Tuesday, February 27, 2007
The Financial Express
NEW DELHI, FEB 26: Indian Oil Corporation (IOC) will enter into an agreement with Nagarjuna Oil Corporation Limited (NOCL) for upliftment and marketing of petroleum products from the latter’s upcoming 6 million tonnes per annum refinery at Cuddalore in Tamil Nadu.
The agreement has been finalised and will be signed after the formal approval of IOC’s board, which meets on Tuesday. The agreement will be for a period of five years and will be reviewed six months prior to the commissioning of the NOCL refinery.
The pricing of the products will be worked out in line with the prevailing industry standards six months prior to the commissioning of NOCL’s refinery. NOCL has given its confirmation to IOC on the quantum of petroleum products to be produced annually. This includes 586 mts of LPG, 812 mts of petrol, 446 mts of kerosene and ATF, 2804 mts of diesel, 138 mts of fuel oil and 73 mts of Bitumen.
NOCL will set up a marketing terminal close to its refinery to supply all products and will be later connected by IOC to its Chennai-Trichy-Madurai pipeline at any appropriate tap-off-point IOC officials clarified that there is no take-or-pay commitment from IOC in respect of upliftment nor is there a supply of pay commitment from NOCL. “IOC has agreed to uplift and market petro products from NOCL’s refinery after considering the availability of these products from IOC’s own refineries and the commitments made by it with other PSU oil companies and refineries of Reliance and Essar Oil. Surplus production of products will be exported by NOCL,” an IOC official said.
Moreover, IOC has asked NOCL to meet strict quality parameters laid by the government. All products will conform to BIS standards and will follow quality control procedures for aviation products as laid down by the Directorate General Civil Aviation (DGCA) and ministry of defence. The petrol and diesel produced at the refinery would have to meet the Euro-III and Euro-IV specifications.