The Hindu Business Line : HPCL to set up single buoy mooring at Vizag

We do not have enough tankage in Vizag to handle all the 250,000-odd tonne crude. We are considering two options. First, we want to share the crude with another party. The second, we may build extra tankages for ourselves," Mr M.B. Lal said.

Mumbai , Nov. 17

IN a bid to reduce its crude transportation and handling cost, Hindustan Petroleum Corporation Ltd (HPCL) proposes to set up a SBM (single buoy mooring) facility at Vizag. The project, which will enable the company to transport crude in very large crude carriers (VLCCs), is estimated to cost around Rs 350 crore, said a senior company official.

This would include costs of building extra tankages to store imported crude oil. HPCL is also examining the option of sharing imported crude brought in large quantities by VLCCs, with other refineries on the East Coast.

The company needs a new SBM for importing its own crude primarily because of two reasons - growing requirement for crude, especially once ongoing expansion work at Trombay and Vizag refineries is completed, and the surmise that availability of crude from ONGC will be lower as it has downstream plans of its own.

"We do not have enough tankage in Vizag to accommodate all the 250,000-odd tonne crude brought in by VLCCs. We are considering two options. One of which is that we share the crude with another party. The second could be building extra tankages for ourselves," Mr M.B. Lal, Chairman and Managing Director, HPCL told Business Line.

The company is presently studying the feasibility of both these options and actual groundwork is expected to begin within 8 to 10 months as the Vizag Port has already agreed to setting up the SBM, said a senior official.

The company buys 75 per cent of its crude from ONGC and other upstream companies while 25 per cent is being bought through spot tenders. If HPCL brings in imported crude requirement through VLCCs, it would lead to annual savings of over Rs 20-30 crore, a senior official said.

HPCL is also planning to hedge its crude import risks and is expected to put in place a `risk management policy' for hedging by the end of this year.

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