Cairn’s Balmer-Gujarat pipeline to be commissioned by March

Cairn India Ltd will commission the $1 billion pipeline for transporting crude oil from its Barmer block in Rajasthan to coastal Gujarat in the current quarter that ends March, director strategy P Elango said.

The commissioning of the pipeline is seen significantly reducing the company’s transportation costs to around $1 per barrel from the current $6-7.

“Last of the pipelines have been lowered (fixed underground) today and the pipeline will be ready in the current quarter,” Elango said. Cairn had started crude oil production from the RJ-ON-90/1 in Rajasthan on August 29.

The company is currently transporting the crude by trucks to coastal Gujarat before shipping to refineries of MRPL and Reliance Industries .

Cairn had previously said the cost incurred by the company for production of one barrel of crude oil from the Barmer block, without the transportation, is $3.5 per barrel production cost, and $1.5 per barrel transportation.

The cost of the specially heated 591-km pipeline is $940 million and is being built from the flange of the block to Salaya in coastal Gujarat for evacuation of the crude.

Cairn is producing close to 20,000 barrels daily and has so far produced 1.7 million barrels since end of August. It has sold four cargoes of around 200,000 barrels each to MRPL so far and three cargoes to Reliance Industries. NW18