Indian Oil chairman MA Pathan told newspersons here on Friday that the joint-venture proposals would be forwarded to the government soon. The Indian Oil board recently decided to set up joint-venture companies with Reliance Petroleum and Essar Oil for marketing their products after the administered price mechanism (APM) is abandoned in 2002.

The partners will have 50 per cent stake each in the joint-venture marketing companies. ``Infrastructure (pipelines) for the outflow of products will also be decided on a 50:50 basis,'' said Pathan.

The national oil company is also committed to market half the motor spirit (MS), high-speed diesel (HSD), liquefied petroleum gas (LPG) and superior kerosene oil (SKO) produced by the private-sector refineries through a 10-year pact,beginning next year. Indian Oil plans to lift some naphtha from the private-sector refineries as well.

The remaining half of the 18 million tonnes of petroleum products being offered by Reliance Petroleum and nine million tonnes to be produced by Essar Oil will be marketed by the joint-venture companies. The scope of the companies is wide, and will subsequently include joint pipeline projects as well.

Pathan said that Indian Oil was setting up a pipeline jointly with Essar and Reliance. The two refineries have 13 per cent stake each in the Vadinar-Kandla pipeline being set up by IOC, under the aegis of Petronet India Ltd.

Meanwhile, Reliance Petroleum has submitted a proposal to the petroleum ministry for a 3,000km pipeline network for evacuating liquid-petroleum products. Essar Oil has also submitted a similar proposal for setting up a network of product pipelines.

There is a thinking within the government, however, that infrastructure for evacuating petroleum products should be set up on the``common carrier'' principle. Petronet India was set up two years ago as a holding company for all such common (petroleum product) carriers for the oil industry.

The holding company has since set up five subsidiaries, which will execute and operate oil pipelines. Essar Oil and Reliance Petroleum have been for a long time canvassing for a stake in Petronet India. Recently, at an oil industry meeting with petroleum secretary TS Vijayaraghavan, the Petronet India promoters decided to consider offering a 10 per cent stake each to Essar Oil and Reliance Petroleum.

Pathan said the Petronet India board would shortly take a decision on inducting the two private-sector refining companies as shareholders. At present, IOC, Hindustan Petroleum Corporation and Bharat Petroleum Corporation jointly hold 50 per cent stake in Petronet India.

The Infrastructure Leasing & Financial Services (IL&FS), the Industrial Credit & Investment Corporation of India (ICICI), and State Bank of India (SBI) are committed to subscribe to30 per cent of the Petronet India equity. The remaining unsubscribed 20 per cent stake may be offered to Reliance Petroleum and Essar Oil.

Essar and Reliance now have a stake in a Petronet India subsidiary. Indian Oil, which is the lead operator of the pipeline, has a 26 per cent stake in the project, along with the holding company Petronet India.

The pipeline will essentially evacuate products from the Essar and Reliance refineries at Jamnagar in Gujarat (close to Vadinar) to Kandla. From Kandla, Indian Oil's huge pipeline network will bring the motor spirit, diesel, LPG and kerosene in west India up north to the fastest-growing market for oil.

Essar and Reliance are now pitching for a stake in the holding company as well, which will give them the right to be lead operators for subsequent pipeline projects.