The petroleum ministry has approved Essar Oil's proposal seeking interconnection with the Indian Oil Corp's (IOC) Salaya-Mathura trunk crude oil pipeline at Vadinar in Gujarat, said a ministry official.
Essar Oil had argued that the proposed interconnection would help to avoid possible disruption in crude supplies to their refineries at Vadinar, Panipat and Mathura through these pipelines in case any offshore tanker-mooring buoy had to be shut down.
The private refiner had approached IOC with the proposal. But the state-owned company did not show much interest, saying it did not see any advantage in the pipeline interconnection, said Essar sources.
The private refiner was told that IOC was expanding the capacity of its Panipat refinery from 12 million metric tonnes per annum (MMTPA) to 15 MMTPA and that it cannot enter into any arrangement that entailed sharing capacity of the linked-crude pipeline with others, said Essar sources.
IOC also expressed apprehension that it might have to curtail crude supply to its own refinery in case Essar Oil's buoy was shut down, forcing it to divert its crude supply to the Essar pipeline.