Mangaluru, the only port city in Karnataka, is already in the world map for its educational institutions, medical colleges, birthplaces of five banks (including four nationalised banks), the only refinery in Karnataka, and for the lone urea manufacturing facility in Karnataka — among many other firsts.
Now, as the work on the underground rock caverns for strategic storage of oil is almost complete, coastal districts Dakshina Kannada and Udupi are in the news again.
While oil major Royal Dutch Shell is said to be in talks to lease India’s new strategic oil caverns at Permude (near Mangaluru in Dakshina Kannada district) and Padur (in Udupi district), the authority concerned — Indian Strategic Petroleum Reserves (ISPRL), a wholly owned subsidiary under Oil Industry Development Board (OIDB) of the Union Ministry of Petroleum — is taking all steps to speed up the work on both the projects to meet the December 2015 deadline.
In fact, out of the three underground rock caverns in India, one is in Visakhapatnam (9.75 million barrels capacity, which is ready for commissioning), while the other two are in Permude (11 million barrels) and Padur (16.12 million barrels). In all, 36.87 million barrels of crude (five million tonnes). The three facilities will be able to store crude for 12 days in case of emergency.
As on date, if all refineries in India are put together, they will be able to store crude oil for only three days of consumption. Hence, when the three facilities are commissioned, India will be able to store crude for 15 days of consumption, much less compared with developed nations which store crude oil for up to 90 days of consumption in their underground caverns.
At both the sites, underground work is almost over. What remains are electrification and laying of pipelines. Awaiting completion are pipeline work extending to nearly 4 km (of the 12 km) from shore to Permude, and 34 km (of the total 36 km) from Permude to Padur. The existing, 17-km-long pipeline from mid-sea mooring system to seashore, presently being used by Mangalore Refineries and Petrochemicals (MRPL), will be used for shipment of crude oil to ISPRL caverns as well.
The beginning
It may be recalled that the government of India proposed to construct the underground cavern storage at Mangaluru based on the detailed feasibility report prepared by Engineers India (EIL) along with Geostock Engineers, France. SKE&C, part of the $138.7-billion South Korean SK Group, with vast experience in the construction of such caverns, tied up with Karam Chand Thapar (KCT) for the execution of the project worth Rs 403.5 crore.
In case of Padur, there are two underground rock cavern divisions, each with 8.6 million barrel capacity worth Rs 375 crore each. While one is being constructed by SKE&C-KCT, the other is being constructed by Hindustan Construction Company (HCC). Work on both cavern divisions is complete and has been sealed a few months ago.
While the work on the underground rock cavern in Mangaluru began in April 2009, the work on the Padur caverns began in May 2010.
tnam, Mangaluru, and Padur are Rs 1,178.35 crore, Rs 1,227 crore and Rs 1,693 crore respectively, and the total cost of all three projects is Rs 4,098.35 crore.
The compensation bug
When contacted, Karnataka Industrial Area Development Board (KIADB) Special Land Acquisition Officer Dase Gowda said that nearly 1,250 notices have been issued to provide compensation for owners of the land through which the 48-km-long pipelines would pass through.
Though 1,250 notices have been issued, the affected persons/families are only 600 (400 in DK from 17 villages, and 200 in Udupi from seven villages) as notices have been issued to all the persons whose name appears on RTC (rights, tenancy, and crop inspection) documents in the proposed land through which the pipeline passes. Interestingly, only 40 persons/families have availed the compensation in DK and 12 persons/families in Udupi district so far, amounting to Rs 55 lakh (out of the Rs 2.5 crore released in the first phase).
“While many could not claim compensation due to lack of documents, improper documents, or lack of documents on inheritance, others want more compensation,” Gowda said. He claimed that the compensation provided in the case of ISPRL pipeline is 10-fold of what is usually paid in such cases. This was done to expedite the pipeline work, he said.
“Under Right of Use (RoU), landowners are free to grow any crop, including paddy, ragi, vegetables, or do any other activity except construct permanent structures (homes) and plant saplings which could grow into huge trees. Though only 10 per cent of market value is given as compensation for RoU, it has been now raised 10-fold. Despite this, many are not coming forward, perhaps due to misguidance by a few leaders,” he rued.
To another query, Gowda said that if the persons concerned fail to accept the compensation, the only other option was to deposit the amount in court as it is a national project. Owners can move court whenever they want settlement, he said.
When contacted over phone, ISPRL Chief Executive Officer Rajan K Pillai said the special purpose vehicle (SPV) is trying its best to complete the project by December 2015. When pointed out that as on date, hardly 10 per cent of persons/families have availed the compensation and work on the pipeline could be started only after that, he said he is trying his best. “We have given the deadline to the contractor and we hope to complete the project by December 2015,” he said. Sources in the district administration, however, said that the completion of the pipeline may be delayed by a few more months, though nothing is impossible.
Once all the work is completed, attention would turn to filling up these three caverns with 36.87 million barrels of crude oil. By some estimates, it will cost more than Rs 25,000 crore. Considering the fact that oil prices are ruling low at present, the speedy completion of the project and quick purchase of crude oil would save a tidy sum for the exchequer.
source: http://www.deccanherald.com / Deccan Herald / Home> Supplements> Economy & Business / by Ronald Anil Fernandes / DHNS – September 14th, 2015