The commissioning of BPCL-KRL’s Rs 821-crore single point mooring project (SPM), which was to be completed before the onset of the southwest monsoon by May-end, has now been delayed due to rains.

A 20-day strike and the breakdown of a crane together resulted in a loss of 40 days, and “now we are looking for a break in the monsoon for at least 15 days,” Mr. E. Nandakumar, In-charge, KRL, told Business Line .

The floating buoy arrived a fortnight ago and is berthed at the Kochi port.

“There won’t be any cost escalation but definitely there will be a time overrun,” he said.

The buoy was manufactured by Dutch firm Blue Water in Indonesia.

Pipelines have already been laid both undersea, up to the point where the buoy is to be anchored, and through the backwaters.

One of the three tanks needed for the project awaits completion, he said, adding that the project could, however, be commissioned with the two ready tanks.

In fact, 95 per cent of the work has been completed. The cost of the project amounts to Rs 730 core excluding taxes, he said.

The 20-day strike by workers related to disputes among various trade unions on the ratio of workers in the loading and unloading sections further extended work into the monsoon season, he said.

Another 20 days were lost in repairing/replacing a malfunctioning crane used by the contractors, he said.

Cost saving

The SPM project has become inevitable for the refineries to reduce crude transportation cost, especially at a time when KRL is expanding capacity from 7.5 million tones per annum (MTPA) to 9.5 MTPA, he said.

KRL currently receives crude oil from Bombay High as well as from other countries at the crude oil terminal (COT) of the Cochin Port Trust.

It deploys limited capacity tankers (up to 70,000 MT) due to draft limitation at the Kochi channel and these results in higher transportation costs, especially when the crude is sourced from far-off countries like Nigeria.

With the use of very large crude carriers (VLCC), the company is expected to save around Rs 200 core in transportation cost.

“To become globally competitive it is essential that KRL makes use of this freight advantage by setting up crude oil receipt facilities (CRF) on its own.

The location of the facilities was thereafter agreed upon based on a mutually beneficial memorandum of understanding with the Cochin Port Trust,” he said.

Salient features

The proposed project consists of the following main facilities:

Single Point Mooring (SPM) 19.4 km off Puthuvypeen lighthouse in the Arabian Sea for handling VLCCs of 300,000-tonne capacity; a submarine pipeline to carry crude oil from SPM to a Shore Tank Farm (STF); Shore Tank Farm for storage of 240,000 KL crude oil at Puthuvypeen Coast, before it is pumped to KRL refinery at Ambalamugal; onshore pipeline between the STF and KRL.

The SPM, he said, is a floating buoy anchored at a depth of 30 meters for mooring large tankers and for receiving crude through floating hoses, under buoy hoses and the submarine pipeline to the shore tanks.