The project has been facing confrontations from local community and stakeholders for over a year now.
The problems in executing the Salaya-Bhogat stretch of the planned pipeline in Jamnagar, have forced Cairn India Ltd to suspend work on the project, according to official sources.
Cairn wrote to the Jamnagar district collector on April 25 informing him about its decision to suspend the Salaya-Bhogat pipeline-laying work. The company said in the letter that it wished to start work on the project of national importance latest by April 25, but the situation has not changed, forcing it to take the decision.
Cairn stated that the pipeline project is facing confrontations from local community as well as stakeholders despite efforts to reach out to all stakeholders to obtain alignment with them and land owners in Right of Use (RoU) areas. It also said that the impasse continues in spite of it offering favourable compensation package to land owners.
"However, the RoUs remain inaccessible in Salaya-Bhogat region," the company said.
The company has informed its contractor L&T to suspend work on the project and close its camp at Khambhaliya.
The troubles started after Cairn alleged that a Congress MP was creating obstacles in execution of the project. Jamnagar MP Vikram Madam shot back with a complaint against a Cairn official and an L&T official alleging that they had offered bribe of Rs2 crore to him and also threatened to kill him.
The project will bring crude oil from Rajasthan oilfields to coastal refineries, which would help in reducing the heavy import bill.
At present, the Barmer to Salaya section of the pipeline is delivering crude oil to Indian Oil and private refiners and contributing nearly 15% of India's domestic demand.
Cairn India currently produces 1, 75,000 barrels of crude oil per day from its Rajasthan Block. The company aims to attain production of 2.40 lakh bpd in calendar year 2013.
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