CKPL, to be set up by Petronet-CCK Ltd, will be financed through a debt-equity ratio of 3:1. This works out to Rs 134 crore as the equity component and debt accounting for Rs 401 crore.

Consequently, BPCL and Petronet, which will hold 26 per cent apiece, will contribute Rs 35 crore each of the equity while CRL will chip in with Rs 31 crore. The balance is proposed to be offered to strategic and financial investors. Project cost has been estimated based on the equipment needed at each terminal, preliminary engineering inputs and in-house data.

The CKPL plan envisages laying a 308 kilometre long multi-product pipeline from BPCL's existing Irimpanan installation at Kerala to the proposed receiving station at Karur,Tamil Nadu, with intermediate tap off points at Shoranur and Coimbatore.

The project includes pumping and despatch facilities at Irimpanam, product tapping facilities at Shoranur and Coimbatore and a full-fledged terminal at Karur with rail/road loading points.

To elaborate on project justification, the demand for petroleum products, mainly high speed diesel (HSD), motor spirit (MS) and superior kerosene oil (SKO) in the southern region is presently being met from the refineries of CRL, Madras Refineries, Mangalore Refinery & Petrochemicals and Hindustan Petroleum Corporation.

The production ex-CRL is distributed to the demand centres by rail, road and offshore tankers. Increasing demand for petro-products has put tremendous pressure on the rail and road networks. Accordingly, requirement for a pipeline has been identified.

Projections on demand for petro-products in the consumption zones -- Palghat, Cannanore, Coimbatore, Tiruchi, Salem, Tirunelveli and Madurai -- indicate the following for 2001-02and 2006-07. Demand for MS is estimated at 386,000 tonnes in 2001-02 and 567,000 tonnes in 2006-07 to which CRL can supply 809,000 tonnes. In the case of SKO, this is 636,000 tonnes and 934,000 tonnes for the two years which will be adequately met by CRL's supply of 991,000 tonnes.

It is only in the case of HSD where there will be a demand-supply mismatch problem. CRL can cater to 3,393,000 tonnes in 2001-02 and 2006-07 when demand during both these periods is projected at 3,445,000 tonnes and 5,062,000 tonnes, respectively. This shortfall is expected to be met from imports at Cochin port.

Based on these estimates, the sectorwise throughput for the pipeline is: Cochin-Shoranur (200,000 tonnes in 2001-02 and 2006-07 apiece); Shoranur-Coimbatore (1,000,000 tonnes in 2001-02 and 1,400,000 tonnes in 2006-07); and Coimbatore-Karur (2,100,000 tonnes in 2001-02 and 2,400,000 tonnes in 2006-07).

According to present plans, Karur has been found to be the most suitable location as compared to alternative spotslike Coimbatore and Tiruchi since most of the throughput would move onwards in the direction of Karur. Besides, Karur is also well connected by rail/road in different directions.

Based on the annual demand projections of different products at each base -- Shoranur, Coimbatore and Karur -- the design throughput of the pipeline is envisaged at 4 million tonnes. At Cochin, a suitable plot has been earmarked in BPCL's Irimpanam installation for locating despatch facilities relevant for pipeline operations such as a pump house, corrosion inhibitor system, metering system etc.