Typical Pipeline Tender

FOR RESTRICTED CIRCULATION ONLY
D t il d Feasibility
Detailed
F
ibilit Report
R
t
on
Ennore-Trichy-Madurai
LPG Pipeline
Ennore
Chengalpet
Pondicherry
Trichy
Madurai
Pipelines Division
January 2013
CONTENT
Chapter
No.
Description
Page
No.
Executive Summary
(i)
Introduction
II
Analysis of Alternatives
III
Need and Justification
13
IV
Design Philosophy
18
Project Description
20
VI
Capital Cost
28
VII
Operating Cost
32
VIII
Financial Analysis
35
Conclusions and Recommendations
37
IX
Annexures
Executive Summary
1.0
INTRODUCTION
1.1
India is deficit in Liquefied Petroleum Gas (LPG). Industry imports LPG to the tune of
5 MMTPA to meet the domestic demand. South India, comprising Andhra Pradesh
(A.P.), Karnataka, Kerala and Tamil Nadu, is also deficit in LPG.
1.2
In 2010-11 and 2011-12, the deficit of LPG in southern region was about 2.8 MMTPA
and 3.0 MMTPA respectively. As per the latest supply-demand assessment, the demand
in south India is expected to be about 6.4 MMTPA in 2016-17 and about 7.3 MMTPA
by 2021-22. Domestic availability of LPG would be about 4.3 MMTPA and
4.5 MMTPA in those years. The deficit in 2016-17 is projected to reduce from the
present level of 3.0 MMTPA to 2.1 MMTPA, mainly due to additional production of
LPG after implementation of the proposed expansion plans at Chennai refinery of
Chennai Petroleum Corporation Limited (CPCL), Kochi refinery, Mangalore refinery
and Vizag refinery, and commissioning of Nagarjuna refinery. However, the deficit is
projected to increase again to 2.8 MMTPA in 2021-22, which would continue. This
deficit would be met by import of LPG through coastal receipts at Ennore, Vizag,
Mangalore and Kochi ports.
1.3
Presently, IOC operates 11 LPG bottling plants in Tamil Nadu viz. Ennore, Erode,
Ilayangudi, Madurai, Mannargudi, Mayiladuthurai, Salem, Trichy, Chengalpet,
Coimbatore and CPCL Chennai and 1 plant at Pondicherry.
1.4
M/s IndianOil Petronas Private Ltd. (IPPL), a Joint Venture of IOC and Petronas,
Malaysia have set up a LPG import terminal at Ennore, primarily to meet the deficit of
LPG in Tamil Nadu. The terminal has been commissioned and is in operation since
August 2012, handling about 100 TMT of LPG per month. It presently supplies LPG to
IOCs bottling plants at Ennore, Ilayangudi, Trichy and Madurai in Tamil Nadu by road
tankers.
1.5
CPCL has monthly output of about 33 TMT of LPG, out of which IOCs share is about
28 TMT. This LPG is predominantly used for meeting non-domestic requirement of all
bottling plants in Tamil Nadu, Cuddapah bottling plant in A.P. and about 50%
requirement of Devanagonthi bottling plant in Karnataka. Requirement of CPCLs
Executive SummaryEnnore-Trichy-Madurai LPG Pipeline
(i)
bottling plant at Chennai is also met by CPCL refinery. Requirement of domestic LPG
in Tamil Nadu, Cuddapah and part requirement of Devanagonthi is met from LPG
import terminal at Ennore by road tankers.
1.6
As these bottling plants are situated at considerable distance from Ennore, an

optimisation study was carried out in 2011, which indicated that there would be
considerable savings if a LPG pipeline system was put in place from Ennore to Trichy
via Chengalpet and Pondicherry to substitute the road movement of LPG exChennai/Ennore to the bottling plants in Tamil Nadu and Pondicherry. Further, nodal
movement from Trichy was envisaged to reduce road movement to other bottling plants
in Tamil Nadu. LPG sourcing for bottling plants in other states of south India would
continue from the existing sources at Ennore, Mangalore, Vizag and the proposed
import terminal at Kochi.
1.7
Vide Agenda Item No. P/224 dated 23.4.2012, Board had accorded first-stage approval
to the proposal of laying a pipeline from Ennore to Trichy for transportation of LPG and
had approved an amount of Rs.5 crore for carrying out pre-project activities, so as to
facilitate preparation of Detailed Feasibility Report (DFR) for the proposal. The Board
had also advised to carry out study of various alternatives of pipeline connectivity to
more bottling plants in Tamil Nadu.
1.8
Subsequent to the first-stage approval, survey of the pipeline route has been completed
and optimisation has been carried out for different pipeline configurations so as to arrive
at the optimum configuration. Details are as under.
1.9
Analysis of Alternatives
1.9.1
To start with, assumptions considered for optimization study carried out in April 2011
for formulation of feasibility report (FR) were revisited. It emerged that, with
materialization of Kochi LPG terminal proposal, which was not considered at the time
of preparation of FR, there might be some impact on the throughput of the proposed
pipeline. Accordingly, optimization study was carried out again in September 2012,
considering LPG import facilities to be available at Kochi by 2016-17. The proposal for
Kochi LPG import terminal was subsequently approved by the Board in
December 2012.
( ii )
1.9.2
Findings of the optimization study of September 2012 were as under.

Scenario
1.
2.
3.
4.
5.
6.
Delivery locations directly

linked with Pipeline
Projected Throughput and Savings
3
(Chengalpet,
Pondicherry,
Trichy)
4
(Chengalpet,
Pondicherry,
Trichy, Madurai)
4
(Chengalpet,
Pondicherry,
Trichy, Salem)
5
(Chengalpet,
Pondicherry,
Trichy, Madurai, Salem)
6
(Chengalpet,
Pondicherry,
Trichy, Salem,
Erode
and
Coimbatore)
7
(Chengalpet,
Pondicherry,
Trichy, Madurai, Salem, Erode
and Coimbatore)
2016-17
2021-22
494 TMT
Rs.64 crore
494 TMT
Rs.73 crore
494 TMT
Rs.74 crore
494 TMT
Rs.82 crore
494 TMT
Rs.78 crore
755 TMT
Rs.117 crore
755 TMT
Rs.130 crore
755 TMT
Rs.132 crore
755 TMT
Rs.146 crore
755 TMT
Rs.153 crore
494 TMT
Rs.82 crore
755 TMT
Rs.165 crore
From the above details, it emerged that throughput of the pipeline would remain the
same in any combination of linked bottling plants.
1.9.3
Preliminary analysis of various alternatives was then carried out and the two best
options were short-listed for preparation of the detailed scheme and cost estimates,
manpower assessment and financial analysis etc. Results of the analysis were as under.
Scenario Length Operating
Capex
Opex
RoI
Rank based
(km) Manpower (Rs. crore) (Rs. lakh) (15 years) on Financial
Attractiveness
1.
494
64
581
30
12.9
1
2.
615
78
719
36
11.1
2
3.
620
92
736
37
10.7
3
4.
742
102
873
42
9.7
4
5.
810
120
948
47
8.6
5
6.
932
130
1068
51
6.4
6
1.9.4 This study concluded that Ennore-Trichy pipeline and Ennore-Trichy-Madurai pipeline
would be the two financially most attractive pipeline configurations.
1.9.5 Based on the above analysis, CO(Optimisation) undertook another study in January
2013, considering updated demand numbers for working out throughput and savings for
the said two pipeline configurations. The study considered all-India supply-demand
scenario for IOC in 2016-17 and 2021-22. Findings of the study were as under.
( iii )
Pipeline Configuration
Ennore-Trichy Pipeline
Throughput
(TMT)
2016-17
2021-22
617
809
Ennore-Trichy-Madurai Pipeline
617
Savings
(Rs.crore)
2016-17 2021-22
92.9
154.5
809
103.5
169.9
It can be noted that throughput projection and savings for both 2016-17 and 2021-22
have improved from earlier workings in both pipeline configurations.
1.9.6 IOC already has a petroleum product pipeline from Chennai to Madurai due to which
right-of-way (RoW) up to Madurai is already available. Therefore, considering
availability of most of the right-of-way up to Madurai and marginal difference in RoI
for pipeline up to Trichy vis--vis pipeline up to Madurai, it was considered prudent to
undertake detailed feasibility study for laying the pipeline up to Madurai. The DFR has
been prepared accordingly.
1.10
The DFR broadly deals with the need and justification, system configuration, cost,
viability, implementation methodology and allied details in respect of the proposed
pipeline from Ennore to Madurai via Trichy. The pipeline would originate at Ennore
import terminal and terminate at the existing Madurai bottling plant, providing pipeline
connectivity en route to the existing LPG bottling plants at Chengalpet, Pondicherry and
Trichy.
2.0
NEED AND JUSTIFICATION
2.1
The demand of LPG in south India in 2011-12 was about 4.5 MMTPA. As per the latest
LPG supply-demand workings by Marketing Division, LPG demand of Industry for
south India is projected as under.
Fig. in MMT
2.2
Year
2016-17
2018-19
2021-22
South India Demand
6.4
6.8
7.3
Considering actual demand of previous year, projected growth rate in the demand and
supply scenario, CO(Optimisation) has carried out optimization study for proposed
Ennore-Trichy-Madurai LPG pipeline for 2016-17 and 2021-22. The study projects
throughput of 617 TMT in 2016-17 and 809 TMT in 2011 for the pipeline and
substantial savings in logistics cost.
( iv )
2.3
At present, CPCL refinery is producing about 33 TMT of LPG per month. CPCLs LPG
is primarily used for bottling plant at Chennai, non-domestic requirement of bottling
plants in Tamil Nadu, Cuddapah in A.P. and partial requirement of Devanagonthi
bottling plants.
2.4
Most of domestic requirement of LPG at IOCs bottling plants in Tamil Nadu,

Cuddapah in A.P. and partial requirement of Devanagonthi is met from LPG import
terminal at Ennore by Road Tankers.
2.6
Throughput Projections
2.6.1
The supply and distribution plans of LPG for various bottling plants linked to the
proposed pipeline, for 2016-17 and 2021-22, have been projected to be as under.
Fig. in TMT
Supply
2016-17 2021-22
Ennore
617
809
port
Distribution
2016-17 2021-22
138
180
Chengalpet
Pondicherry
43
44
Trichy
273
385
Madurai
163
200
(134)
(235)
Nodal movement from Trichy

-
Salem
101
112
Erode
81
Coimbatore
30
42
(24)
(50)
Nodal movement from Madurai

-
Ilayangudi
18
43
Tirunelveli
Bottling Plant at Trichy
139
150
Bottling Plant at Madurai
139
150
Total
617
809
2.6.2 It may be seen from the above table that out of the projected throughput of 617 TMT for
2016-17, about 134 TMT and 24 TMT of LPG would be transported through road from
Trichy and Madurai respectively. Similarly, out of the projected throughput of 809 TMT
(v)
for 2021-22, about 235 TMT and 50 TMT of LPG would be transported through road
from Trichy and Madurai respectively.
2.7
The long-term projected throughput for the pipeline would be as under. For working out
projected demand beyond 2021-22, growth rate of 1.76% has been considered, as
assessed by the Planning Cell of Marketing Division. As the pipeline would originate
from Ennore import terminal, the additional demand would be met by increasing the
imports.
Throughput Projections (TMT)
2.8
2016-17
2021-22
2026-27
617
809
883
It is pertinent to mention here that while some of the bottling plant capacities are
projected to be saturated during 2016-17, the demand in attached markets would
continue to increase. Therefore, it would be required to either stretch the capacities of
the existing plants or set up new bottling plants in and around the existing markets to
meet the increased LPG demand as required. Therefore, the pipeline facilities have been
designed considering long-term demand projections.
2.9
For facilitating nodal movement to linked bottling plants from Trichy and Madurai, the
existing unloading bays would be converted to loading bays.
2.10
The transportation requirement of LPG volumes indicated in para 2.7 can be met by the
following alternative modes.
a)
By Road
b)
By Pipeline
Railway has not been considered as a feasible transportation option for LPG as the
existing bottling plants do not have rail linkage.
2.11
It has been established the world over that pipelines are superior means for
transportation of petroleum products compared to other modes viz. rail, road, tankers
etc. due to their inherent advantages like reliability, economy, safety, flexibility, low
energy consumption, low transit losses and negligible impact on environment.
Construction of new pipelines provides relief to other modes of transportation for
movement of essential commodities and passengers.
( vi )
2.12
In view of the above, it is proposed to lay Ennore-Trichy-Madurai LPG pipeline for

transportation of LPG from Ennore to the LPG bottling plants at Chengalpet,
Pondicherry, Trichy and Madurai. The proposed pipeline would realign movement of
LPG for certain other bottling plants viz. Salem, Coimbatore, Erode, Ilayangudi and
Tirunalveli from Trichy and Madurai in place of the present practice of movement from
Ennore. Thus, the proposed pipeline would considerably reduce distances involved in
road movements and thereby, logistics cost.
3.0
Design Capacity
3.1
Taking into account findings of the optimization study and the requirements of linked
bottling plants, it is proposed to design the proposed LPG pipeline from Ennore to
Madurai for a capacity of 0.9 MMTPA.
4.0
Project Description
4.1
Pipeline Route
4.1.1
The proposed pipeline would originate at IPPLs LPG import facilities at Ennore and
would follow an independent route for approximately 30 km, where it would meet the
existing right-of-way (RoW) of Chennai-Trichy-Madurai Pipeline (CTMPL) at its
chainage 27.4 km. Thereafter, the pipeline would follow the RoW of CTMPL up to
Madurai via Asanur except for about 5.3 km detour for linking Chengalpet bottling
plant, about 55 km to Pondicherry bottling plant and about 19 km to Trichy. The
pipeline, after leaving CTMPL RoW near Madurai delivery station of CTMPL, would
further follow an independent route for about 28 km to reach the bottling plant at
Madurai.
4.2
System Configuration
4.2.1 Configuration of the pipeline system broadly comprises the following.

Total length: 615 km
419 km long, 10.75 OD x 0.25 WT pipeline section from Ennore to T-Point

location for Trichy bottling plant
55 km long, 8.625 OD x 0.25 WT branch pipeline from T-point to

Pondicherry and 19 km long, 8.625 OD x 0.25 WT branch pipeline from Tpoint to Trichy
( vii )
122 km long, 8.625 OD x 0.25 WT, branch pipeline from T-point location
for Trichy to Madurai
2 booster pumps and 3 motor-driven mainline pumping units with variable

frequency drive at Ennore
Scraper facilities at T-point locations for branches to Pondicherry and Trichy
bottling plants
Delivery facilities at Chengalpet, Pondicherry, Trichy and Madurai
4.3
Operation Philosophy
4.3.1 Operation of the pipeline would predominantly be through heart-cut mode.

4.4
Implementation Methodology
4.4.1 It is proposed to take up execution of the project through in-house expertise.

4.5
Statutory Clearances
4.5.1 Suitable actions will be taken for obtaining MoE&F clearance and other statutory
clearances for the proposed pipeline from concerned authorities, as applicable.
4.6
Construction Schedule
4.6.1 The proposed scheme is expected to be completed in a period of about 30 months after
receipt of statutory clearances.
4.7
Manpower Requirement
4.7.1 The manpower requirement would be about 82 during construction phase and about 76
for operation of the pipeline, excluding Line Patrolmen (LPM). The requirement of
LPM for the new portion of right-of-way is envisaged to be outsourced.
5.0
Capital Cost
5.1
The pipeline system from Ennore to Madurai is estimated to cost Rs.711 crore,
including a foreign exchange component of Rs.202 crore, at December 2012 price level.
This includes Rs.60 lakh required for modifications in unloading bays at Trichy and
Madurai bottling plants for their use as loading bays.
5.2
The cost estimates have been prepared on conservative basis without considering
benefits under EPCG (Export Promotion Capital Goods) scheme.
6.0
Operating Cost
6.1
Operating cost of the pipeline system includes the cost of power for mainline pumping
units, utilities, consumables, salaries and wages, administrative overheads, repair and
( viii )
maintenance etc. The operating cost corresponding to throughput of 0.9 MMTPA is

estimated to be about Rs.30 crore per annum at December 2012 price level.
7.0
Financial Analysis
7.1
Capital cost of the project is considered to be financed through internal

resources/commercial borrowings. For the purpose of financial analysis, debt:equity
ratio of 1:1 has been considered, with interest @ 10.75% per annum and repayment in 8
equal annual installments, with one-year moratorium from the date of commissioning.
Requirement of working capital will be met through internal resources.
7.2
Financial analysis for the proposed pipeline system has been carried out taking into
account the following.
Capital cost of the pipeline and its operation for 15 years / 25 years
Throughput as indicated in the optimization study for 2016-17 and 2021-22

Corporate savings assessed in the optimization study, as revenue
Benefit due to lower transit loss in pipeline transportation compared to losses

permitted for transportation through road tankers
Savings in loading and decanting charges associated with road tankers on notional
basis
Results of the financial analysis are as under.
7.3
15 years Operation
25 years Operation
RoI (%)
16.2
17.5
RoE (%)
19.8
21.1
Sensitivity analysis has also been carried out, the results of which are as under.
15 years Operation
25 years Operation
RoI (%)
RoE (%)
RoI (%)
RoE (%)
Increase in capital cost by 10%
14.8
17.6
16.2
19.1
Increase in operating cost by 10%
16.0
19.4
17.3
20.7
Decrease in throughput by 10%
14.2
16.8
15.8
18.5
All the above together
12.6
14.3
14.3
16.3
Case
( ix )
7.4
Economics of Ennore-Trichy Pipeline
7.4.1 Sensitivity analysis has also been carried out considering termination of the pipeline at
Trichy itself. The return on investment improves marginally in this case.
15 years Operation
25 years Operation
RoI (%)
18.0
19.2
RoE (%)
22.1
23.2
8.0
Conclusions and Recommendations
8.1
Most of the LPG bottling plants in Tamil Nadu are situated at considerable distance
from Ennore. Optimization study indicates that there would be considerable savings by
laying a LPG pipeline from Ennore to Madurai via Chengalpet, Pondicherry and Trichy,
which would substitute road movement of LPG ex-Ennore to these bottling plants.
8.2
Results of the financial analysis indicate that the proposed pipeline is viable under most
of the scenarios considering the prevailing hurdle rate of 13%. The pipeline will
facilitate cost-effective transportation of LPG from Ennore to different bottling plants in
Tamil Nadu and one plant at Pondicherry.
8.3
IOC intends to lay several LPG pipelines to provide connectivity to its major LPG
bottling plants. With commissioning of LPG import terminal at Ennore and
implementation of Kochi terminal, potential exists to lay new LPG pipelines from these
two sources and formation of a LPG grid in south India in future. It would, therefore, be
prudent to lay the proposed Ennore-Trichy-Madurai LPG pipeline for providing pipeline
connectivity to all major bottling plants en route. Providing pipeline connectivity to
other major bottling plants in Tamil Nadu viz. Coimbatore, Salem and Erode could be
examined at a later stage.
8.4
Keeping the above in view, it is recommended to lay Ennore-Trichy-Madurai LPG

pipeline at an estimated cost of Rs.711 crore, including a foreign exchange component
of Rs.202 crore, at December 2012 price level. This includes cost of modifications in
Marketing facilities at Trichy and Madurai at an estimated cost of Rs.60 lakh.
***
(x)
CHAPTER I
1.0
INTRODUCTION
1.1
India is deficit in Liquefied Petroleum Gas (LPG). Industry imports LPG to the tune of
5 MMTPA to meet the domestic demand. South India, comprising Andhra Pradesh
(A.P.), Karnataka, Kerala and Tamil Nadu, is also deficit in LPG.
1.2
In 2010-11 and 2011-12, the deficit of LPG in southern region was about 2.8 MMTPA
and 3.0 MMTPA respectively. As per the latest supply-demand assessment, the
demand in south India is expected to be about 6.4 MMTPA in 2016-17 and about
7.3 MMTPA by 2021-22. Domestic availability of LPG would be about 4.3 MMTPA
and 4.5 MMTPA in those years. The deficit in 2016-17 is projected to reduce from the
present level of 3.0 MMTPA to 2.1 MMTPA, mainly due to additional production of
LPG after implementation of the proposed expansion plans at Chennai refinery of
Chennai Petroleum Corporation Limited (CPCL), Kochi refinery, Mangalore refinery
and Vizag refinery, and commissioning of Nagarjuna refinery. However, the deficit is
projected to increase again to 2.8 MMTPA in 2021-22, which would continue. This
deficit would be met by import of LPG through coastal receipts at Ennore, Vizag,
Mangalore and Kochi ports.
1.3
Presently, IOC operates 11 LPG bottling plants in Tamil Nadu viz. Ennore, Erode,
Ilayangudi, Madurai, Mannargudi, Mayiladuthurai, Salem, Trichy, Chengalpet,
Coimbatore and CPCL Chennai and 1 plant at Pondicherry.
1.4
M/s IndianOil Petronas Private Ltd. (IPPL), a Joint Venture of IOC and Petronas,
Malaysia have set up a LPG import terminal at Ennore, primarily to meet the deficit of
LPG in Tamil Nadu. The terminal has been commissioned and is in operation since
August 2012, handling about 100 TMT of LPG per month. It presently supplies LPG
to IOCs bottling plants at Ennore, Ilayangudi, Trichy and Madurai in Tamil Nadu by
road tankers.
1.5
CPCL has monthly output of about 33 TMT of LPG, out of which IOCs share is about
28 TMT. This LPG is predominantly used for meeting non-domestic requirement of all
bottling plants in Tamil Nadu, Cuddapah bottling plant in A.P. and about 50%
DFR Ennore-Trichy-Madurai LPG Pipeline
Page 1 of 38
requirement of Devanagonthi bottling plant in Karnataka. Requirement of CPCLs

bottling plant at Chennai is also met by CPCL refinery. Requirement of domestic LPG
in Tamil Nadu, Cuddapah and part requirement of Devanagonthi is met from LPG
import terminal at Ennore by road tankers.
1.6
As these bottling plants are situated at considerable distance from Ennore, an

optimisation study was carried out in 2011, which indicated that there would be
considerable savings if a LPG pipeline system was put in place from Ennore to Trichy
via Chengalpet and Pondicherry to substitute the road movement of LPG exChennai/Ennore to the bottling plants in Tamil Nadu and Pondicherry. Further, nodal
movement from Trichy was envisaged to reduce road movement to other bottling
plants in Tamil Nadu. LPG sourcing for bottling plants in other states of south India
would continue from the existing sources at Ennore, Mangalore, Vizag and the
proposed import terminal at Kochi.
1.7
Vide Agenda Item No. P/224 dated 23.4.2012, Board had accorded first-stage approval
to the proposal of laying a pipeline from Ennore to Trichy for transportation of LPG
and had approved an amount of Rs.5 crore for carrying out pre-project activities, so as
to facilitate preparation of Detailed Feasibility Report (DFR) for the proposal. The
Board had also advised to carry out study of various alternatives of pipeline
connectivity to more bottling plants in Tamil Nadu.
1.8
Subsequent to the first-stage approval, survey of the pipeline route has been
completed. Based on the optimisation study for different pipeline configurations,
preliminary analysis of various alternatives was carried out and the two best options
were short-listed for preparation of the detailed scheme and cost estimates, manpower
assessment and financial analysis etc. This study concluded that Ennore-Trichy
pipeline and Ennore-Trichy-Madurai pipeline would be the two financially most
attractive pipeline configurations. The study has been covered in details in Chapter-II.
1.9
Based on the above analysis, CO(Optimisation) undertook another study in January

2013, considering updated demand numbers for working out throughput and savings
for the two pipeline configuration i.e. Ennore-Trichy pipeline and Ennore-TrichyMadurai pipeline. IOC already has a petroleum product pipeline from Chennai to
Madurai due to which right-of-way (RoW) up to Madurai is already available.
Therefore, considering availability of most of the right-of-way up to Madurai and
Page 2 of 38
marginal difference in Return-on-Investment (RoI) for pipeline up to Trichy vis--vis

pipeline up to Madurai, it is considered prudent to undertake detailed feasibility study
including viability study for laying the pipeline up to Madurai. The DFR has been
prepared accordingly.
1.10
The DFR broadly deals with the need and justification, system configuration, cost,
viability, implementation methodology and allied details in respect of the proposed
pipeline from Ennore to Madurai via Trichy. The pipeline would originate at Ennore
import terminal and terminate at the existing Madurai bottling plant, providing pipeline
connectivity en route to the existing LPG bottling plants at Chengalpet, Pondicherry
and Trichy.
Page 3 of 38
CHAPTER - II
2.0
ANALYSIS OF ALTERNATIVES
2.1
While analyzing the proposal seeking first-stage approval for Ennore-Trichy LPG
pipeline, a view emerged that options be explored for minimizing nodal movement
through road tankers and, instead, feeding additional bottling plants in the region
through the pipeline itself. Accordingly, a preliminary feasibility study was carried out
for linking the proposed Ennore-Trichy LPG pipeline with 6 major bottling plants in
Tamil Nadu viz. Chengalpet, Trichy, Madurai, Salem, Erode and Coimbatore and one at
Pondicherry. The study indicated that Ennore-Trichy pipeline configuration was
financially most attractive among various pipeline alternatives.
2.2
Accordingly, IOC Board accorded first-stage approval to the proposal of laying a

pipeline from Ennore up to Trichy for transportation of LPG and sanctioned an amount
of Rs.5 crore for carrying out pre-project activities, so as to facilitate preparation of
Detailed Feasibility Report (DFR) for the proposal. At the same time, Board also
advised to carry out study of various alternatives for connectivity of more bottling plants
in Tamil Nadu.
2.3
In the mean time, a proposal for LPG terminal at Kochi proposal was revived, and was
approved by the Board in December 2012. This development was a major change in the
basic premises considered for preparation of Ennore-Trichy LPG pipeline proposal, as
feasibility report of Ennore-Trichy pipeline was based on the optimization study
considering without LPG import facilities at Kochi. Approval of the proposed LPG
import facilities at Kochi mandated fresh optimization study for the proposed pipeline.
Accordingly, an optimization study was carried out in September 2012, considering
import facilities at Kochi functional by 2016-17.
2.4
Findings of the optimization study of September 2012 were as under.
Page 4 of 38
Scenario
Delivery locations directly

linked with Pipeline
Projected Throughput and Savings

2016-17
2021-22
1.
3 (Chengalpet, Pondicherry,
Trichy)
494 TMT
Rs.64 crore
755 TMT
Rs.117 crore
2.
Trichy, Madurai)
494 TMT
Rs.73 crore
755 TMT
Rs.130 crore
3.
Trichy, Salem)
494 TMT
Rs.74 crore
755 TMT
Rs.132 crore
4.
Trichy, Madurai, Salem)
494 TMT
Rs.82 crore
755 TMT
Rs.146 crore
5.
Trichy, Salem, Erode and
Coimbatore)
494 TMT
Rs.78 crore
755 TMT
Rs.153 crore
6.
Trichy, Madurai,
Salem,
Erode and Coimbatore)
494 TMT
Rs.82 crore
755 TMT
Rs.165 crore
From the above details, it emerged that throughput of the pipeline would remain the
same in any combination of linked bottling plants.
2.5
Preliminary analysis of various alternatives was then carried out and the two best options
were short-listed for preparation of the detailed scheme and cost estimates, manpower
assessment and financial analysis etc.
Findings of the study were as under.
Scenario Length Operating
Capex
Opex
RoI
(km) Manpower (Rs. crore) (Rs. lakh) (15 years)
1.
494
64
581
30
12.9
Ranking
based on
Financial
Attractiveness
1
2.
615
78
719
36
11.1
3.
620
92
736
37
10.7
4.
742
102
873
42
9.7
5.
810
120
948
47
8.6
6.
932
130
1068
51
6.4
Page 5 of 38
2.6
This study concluded that Ennore-Trichy pipeline and Ennore-Trichy-Madurai pipeline

would be the two financially most attractive pipeline configurations.
2.7
Based on the above analysis, CO(Optimisation) undertook another study in January

2013, considering updated demand numbers for working out throughput and savings
for the said two pipeline configurations. Summary Report of this study is given in
Attachment 2.1.
2.8
Considering availability of most of the right-of-way up to Madurai and marginal

difference in return on investment (RoI) for pipeline up to Trichy vis--vis pipeline up to
Madurai, it was considered prudent to undertake proposal for laying the pipeline up to
Madurai.
2.9
Accordingly, the DFR has been prepared for 615 km long Ennore-Trichy-Madurai
LPG pipeline.
Page 6 of 38
CHAPTER - III
3.0
NEED AND JUSTIFICATION
3.1
The demand of LPG in south India in 2011-12 was about 4.5 MMTPA. As per the
latest LPG supply-demand workings by Marketing Division, LPG demand of Industry
for south India is projected as under.
Fig. in MMT
3.2
Year
2016-17
2018-19
21-22
South India Demand
6.4
6.8
7.3
Considering actual demand of previous year, projected growth rate in the demand and
supply scenario, CO(Optimisation) has carried out optimization study for proposed
Ennore-Trichy-Madurai LPG pipeline for 2016-17 and 2021-22. This study projects
throughput of 617 TMT in 2016-17 and 809 TMT in 2021-22 for the pipeline and
substantial savings in logistics cost for transportation of LPG. The financial analysis of
laying own LPG pipeline vis--vis use of alternate mode i.e. road has been covered in
details in Chapter-VIII.
3.3
At present, CPCL refinery is producing about 33 TMT of LPG per month. CPCLs
LPG is primarily used for bottling plant at Chennai, non-domestic requirement of
bottling plants in Tamil Nadu, Cuddapah in A.P. and partial requirement of
Devanagonthi bottling plants.
3.4
Most of domestic requirement of LPG at IOCs bottling plants in Tamil Nadu,

Cuddapah in A.P. and partial requirement of Devanagonthi is met from LPG import
terminal at Ennore by Road Tankers.
3.5
Throughput Projections
3.5.1
The supply and distribution plans of LPG for various bottling plants linked to the
proposed pipeline, for 2016-17 and 2021-22, have been projected to be as under.
Fig. in TMT
Supply
2016-17 2021-22
Ennore port
617
809
Distribution
Chengalpet
2016-17 2021-22
138
180
Page 13 of 38
Supply
2016-17 2021-22
Ennore port
Distribution
2016-17 2021-22
43
44
Pondicherry
Trichy
273
385
Madurai
163
200
(134)
(235)
Nodal movement from Trichy

-
Salem
101
112
Erode
81
Coimbatore
30
42
(24)
(50)
Nodal movement from

Madurai
-
Ilayangudi
18
43
Tirunelveli
Bottling Plant at Trichy
139
150
Bottling Plant at Madurai
139
150
617
809
Total
3.5.2
It may be seen from the above table that out of the projected throughput of 617 TMT
for 2016-17, about 134 TMT and 24 TMT of LPG would be transported through road
from Trichy and Madurai respectively. Similarly, out of the projected throughput of
809 TMT for 2021-22, about 235 TMT and 50 TMT of LPG would be transported
through road from Trichy and Madurai respectively.
Schematic presentations of section-wise projected throughput and nodal movements
for 2016-17 and 2021-22 are given at Attachment 3.1 and 3.2.
3.6
The long-term projected throughput for the pipeline would be as under. For working
out projected demand beyond 2021-22, growth rate of 1.76% has been considered, as
assessed by the Planning Cell of Marketing Division. As the pipeline would originate
from Ennore import terminal, the additional demand would be met by increasing the
imports.
Throughput Projections (TMT)
2016-17
2021-22
2026-27
617
720
786
Page 14 of 38
3.7
It is pertinent to mention here that while some of the bottling plant capacities are
projected to be saturated during 2016-17, the demand in attached markets would
continue to increase. Therefore, it would be required to either stretch the capacities of
the existing plants or set up new bottling plants in and around the existing markets to
meet the increased LPG demand as required. Therefore, the pipeline facilities have
been designed considering long-term demand projections.
3.8
For facilitating nodal movement to linked bottling plants from Trichy and Madurai, the
existing unloading bays would be converted to loading bays.
3.9
The transportation requirement of LPG volumes indicated in para 3.6 can be met by
the following alternative modes.
a)
By Road
b)
By Pipeline
Railway has not been considered as a feasible transportation option for LPG as the
existing bottling plants do not have rail linkage.
3.10
It has been established the world over that pipelines are superior means for
transportation of petroleum products compared to other modes viz. rail, road, tankers
etc. due to their inherent advantages like reliability, economy, safety, flexibility, low
energy consumption, low transit losses and negligible impact on environment.
Construction of new pipelines provides relief to other modes of transportation for
movement of essential commodities and passengers.
3.11
In view of the above, it is proposed to lay Ennore-Trichy-Madurai LPG pipeline for

transportation of LPG from Ennore to the LPG bottling plants at Chengalpet,
Pondicherry, Trichy and Madurai. The proposed pipeline would realign movement of
LPG for certain other bottling plants viz. Salem, Coimbatore, Erode, Ilayangudi and
Tirunelveli from Trichy and Madurai in place of Ennore. Thus, the proposed pipeline
would considerably reduce distances involved in road movements and thereby,
logistics cost.
Page 15 of 38
Attachment 3.1
Page 16 of 38
Attachment 3.2
Page 17 of 38
CHAPTER - IV
4.0
DESIGN PHILOSOPHY
4.1
Introduction
4.1.1
This chapter covers the basic data and design parameters adopted for preparing this
report.
4.2
Products to be handled
4.2.1
The proposed Ennore-Trichy-Madurai LPG pipeline is envisaged to be used for

transportation of LPG.
4.3
Product Characteristics
4.3.1
The pipeline system has been designed on the basis of the following characteristics of
LPG.
Specific Gravity
: 0.54
Kinematic Viscosity
: 0.29 cst
4.4
Design Capacity
4.4.1
The pipeline has been designed for a capacity of 0.9 MMTPA under heart-cut
operation philosophy.
However, it would be possible to stretch the capacity up to 0.95 MMTPA with existing
facilities to take care of seasonal variations in demand.
4.5
Design Parameters
4.5.1
For mainline as well as station piping, a weld joint factor of 1.00 (one) has been
considered.
4.5.2
Maximum allowable operating pressure (MAOP) of the system is based on 72% of the
specified minimum yield strength of the pipe material.
4.5.3
The pipeline system has been designed considering round the clock operation on threeshifts a day basis.
Page 18 of 38
4.5.4
No corrosion allowance has been considered in the wall thickness of the pipe, as
effective corrosion mitigation measures would be provided in the system.
4.5.5
Pipes of higher wall thickness are envisaged to be laid across major rivers, water
courses etc. At rail and road crossings, where casing pipe would be provided, the pipe
wall thickness would remain same as that for the main pipeline.
Page 19 of 38
CHAPTER-V
5.0
PROJECT DESCRIPTION
5.1
Introduction
5.1.1
This chapter broadly deals with various features of the project viz. pipeline sizing,
pipeline route, system configuration, facilities required, cathodic protection,
telecommunication
&
telesupervisory
system,
implementation
methodology,
construction schedule etc. for laying a LPG pipeline from Ennore to Madurai.
5.2
Pipeline Size Optimization
5.2.1
Different alternative pipe sizes have been considered for the pipeline system. The
alternatives have been compared on the basis of the present value of costs, worked out
at 13% rate of discount, over 15 years of operation. Results of the study indicate that
the pipeline system using 10.75 OD x 0.25 WT for Ennore-Trichy section;
8.625 OD x 0.25 WT for Trichy-Madurai and branches to Pondicherry and Trichy of
8.625 OD x 0.25 WT would be the optimum pipeline configuration for given
projected throughput.
5.3
Hydraulics and System Configuration
5.3.1
Based on the pipeline throughput requirements, hydraulic details have been worked
out. Details are as under.
Length (km)
: 615 km
Section wise Capacity (MMTPA) / Flow Rate (kl/hr)

Ennore to Chengalpet
: 0.90 (208 kl/hr)
Chengalpet to T-Point for Pondichrry
: 0.80 (185 kl/hr)
Pondichrry T-Point to T-Point for Trichy
: 0.70 (162 kl/hr)
T-Point for Trichy to Madurai
: 0.30 (69 kl/hr)
Branch to Pondicherry
: 0.10 (23 kl/hr)
Branch to Trichy
: 0.45 (104 kl/hr)
Page 20 of 38
Line Size /MAOP

Line Size
MAOP
OD (inch) Dia (inch)
Grade
(mcl) (Kg/cm2)
10.75
0.25
API-5L X52 2267
122
Section
Ennore- T Point for Trichy
T Point for Trichy to Madurai
Branch to Pondicherry BP
8.625
0.25
API-5L X46 2500
135
Branch to Trichy BP
Hydraulics (Considering simultaneous heart cut delivery at all ToPs)
S.
No.
Station
Chainage(#) Altitude
(km)
(m)
1. Ennore
SDH
(mcl)
RH
(mcl)
No. of
Pumping
Units
1723
(2+1)
2. Chengalpet
125
22
1270
3. Pondicherry TP
226
64
946
4. Trichy TP
419
128
464
5. Madurai
541
204
222
Pondicherry BP
55 ex-TP
12
988#
Trichy BP
19 ex-TP
113
423#
km: Kilometre, m: Metre, mcl: Metre Column of Liquid(LPG), SDH: Station Discharge
Head, RH: Residual Head
# Actual RH before pressure control valve. To be brought down to 222 mcl for delivery.
Hydraulic gradient is placed at Annexure-I.
5.4
System requirements
5.4.1
Configuration of the pipeline system broadly comprises the following.

Total length: 615 km
419 km long, 10.75 OD x 0.25 WT pipeline section from Ennore to T-Point

location for Trichy bottling plant
55 km long, 8.625 OD x 0.25 WT branch pipeline from T-point to

Pondicherry and 19 km long, 8.625 OD x 0.25 WT branch pipeline from Tpoint to Trichy
Page 21 of 38
122 km long, 8.625 OD x 0.25 WT, branch pipeline from T-point location
for Trichy to Madurai
2 booster pumps and 3 motor-driven mainline pumping units with variable

frequency drive at Ennore
Scraper facilities at T-point locations for branches to Pondicherry and Trichy
bottling plants
Delivery facilities at Chengalpet, Pondicherry, Trichy and Madurai
Schematic flow diagram of the pipeline system is given in Annexure-II.
5.5
Pipeline route
5.5.1
The proposed pipeline would originate at IPPLs LPG import facilities at Ennore and
would follow an independent route for approximately 30 km, where it would meet the
existing RoW of Chennai-Trichy-Madurai Pipeline (CTMPL) at its chainage 27.4 km.
Thereafter, the pipeline would follow the RoW of CTMPL up to Madurai via Asanur
except for about 5.3 km detour for linking Chengalpet bottling plant, about 55 km to
Pondicherry bottling plant and about 19 km to Trichy. The pipeline, after leaving
CTMPL RoW near Madurai delivery station of CTMPL, would further follow an
independent route for about 28 km to reach the bottling plant at Madurai. An indicative
route map is enclosed as Annexure-III.
5.5.2
The terrain along the pipeline route is mostly flat and plain with agricultural and paddy
field, which also includes stretches of rocky terrain and low lying area in between. The
pipeline would be provided with motor operated sectionalisation valves (SVs) at
regular intervals all along the pipeline route including providing additional motor
operated SVs at both sides of each major river/ canal crossings. These mainline SVs
would be provided as per the provisions of OISD-214.
5.5.3
The pipeline would cross a number of rivers, canals, nallas, roads and railway tracks.
The pipeline across major perennial rivers/canals are proposed to be installed by using
Horizontal Directional Drilling (HDD) technique, whereas across minor rivers/ canals,
pipeline would be laid by submerged crossing method. Provision has also been kept for
installing pipeline by HDD technique across selected National/ State Highways.
Pipeline across railway crossings and selected National/State Highways would be laid
by using bored cased crossing method.
Page 22 of 38
5.6
Pump Station and Facilities
5.6.1
Civil
5.6.1.1 Civil structures are envisaged to be erected at the stations to provide shelter to men and
machinery. Pump shed and booster shed to accommodate the pumping units with
associated facilities have been planned to be of steel structure. The civil structures
would also be provided to house control panels, MCC panels, HT/LT panels, batteries,
etc. All the safety factors like wind load, seismic load, soil bearing capacity etc. would
be taken into account while designing the civil structures.
Facilities such as pump shed, control building, HT/LT panel rooms, VFD room,
workshop, stores, watchman cabin, etc. have been envisaged at Ennore pump station,
whereas facilities like control building, MCC building, workshop, store, watchman
cabin, etc. have been envisaged at each LPG delivery station locations.
5.6.1.2 Provision of land acquisition/ purchase has been kept for T-Point locations and for new
RCP/ SV stations along the mainline route.
5.6.2
Cathodic protection system
5.6.2.1 Temporary Cathodic Protection system with the requisite design life is envisaged
during the construction phase using the Mg anodes in line with OISD guidelines.
To mitigate the external corrosion of mainline, impressed current cathodic protection
system shall be provided. The system envisages impressed current anodes with AC/AC
cum DC operated cathodic protection inputs having uninterrupted power supply
arrangement.
5.6.3
Mechanical
5.6.3.1 Motor driven mainline pumping units (MLPUs) having variable frequency drive
(VFD) and horizontal spilt case centrifugal pump shall be installed at Ennore pumping
station with 2+1 (2 running and 1 standby) combination. Provision has been kept for
booster pumps at Ennore.
5.6.3.2 Piping system shall be designed as per ASME B 31.4 standard. Pipes, pipe fittings,
flanges etc. will conform to International Standards such as API 5L, ASTM A 106
Grade B / A333 Gr-6, ANSI B-16.5, ANSI B-16.25, WPB-234, MSS-SP-44, MSS-SP75 etc. and will be suitable for ANSI-600 and ANSI 300 pressure classes. Gate valves,
ball valves, swing check valves will conform to API 6D standards. Electric motor
actuators of suitable power ratings will be installed for the operation of valves. Pigging
facilities have been considered.
Page 23 of 38
5.6.4
Fire Fighting System
5.6.4.1 Fire detection & alarm system: For the Control building, smoke detectors and rate of
rise (RoR) heat detectors along with Fire Alarm Panel and SIL-3 rated PLC with HMI
have been considered for all attended stations. For Pump house, Ultra Violet/ Infrared
flame detectors, RoR heat detectors have been considered. HC detectors and smoke
detectors have been considered for all RCPs and T-points.
5.6.4.2 Fire Suppression system: Besides portable Fire extinguishers, CO2 flooding would be
provided in cable trenches, hydrants. Water monitors would be provided suitably in the
piping area. The numbers and type of extinguisher would be in line with OISD 214.
The piping would be hooked with IPPL fire water network at Ennore to meet any
exigency requirement. Firewater network (with required number of Water monitors
and hydrants with double landing valves) would be provided at LPG delivery locations
and the same would be hooked with marketing fire water network at all the exiting
bottling plants. Gas Monitoring System has been considered for MLPU and piping
area. Medium Velocity Water Sprinkler system considered for MLPU and piping and
metering and scrapper barrel area.
5.6.5
Electrical
5.6.5.1 The electrical system at Ennore would be designed for receiving power supply at
33 KV level through independent feeder from state electricity board/port authority.
33/6.6 KV, 6 MVA outdoor switchyard works have been envisaged for this purpose.
The prime movers would be 6.6 KV Motors with AC Variable Speed Drive for energy
saving during variable speed requirement. Ennore being the mother station, one 6.6
KV, 2 MVA HT DG Set has been considered for running the station in case of mains
power failure.
5.6.5.2 Building lighting & air conditioning, HT & LT Panel with battery back-up and High
Masts for outdoor lighting would be provided. All cabling would be XLPE insulated as
per IS-7098. All lighting luminaries would be energy efficient and flame-proof
certified for battery area. APFC Panel would also be provided to maintain power factor
near unity.
5.6.5.3 At Chengalpet, Pondicherry, Trichy and Madurai, incoming grid supply has been
considered at LT 415V level through Marketing installation connection. For back-up
supply DG Set with Auto-Mains failure would be provided.
Page 24 of 38
5.6.6
Instrumentation and Station Control Centre
5.6.6.1 All stations would be provided with hot standby PLC based station control system to
perform local control functioning and to monitor and report local conditions (except at
block valves (BV) / river MOV locations / sectionalizing valve (SV) locations where
non-redundant PLC / RTUs shall be provided).
5.6.6.2 The field instrumentation at all the attended stations would comprise pressure
transmitters, pressure switches, pressure gauges, mass flow meters, temperature gauge,
temperature transmitter, scraper detector, emergency shut down switches etc.
5.6.6.3 All SV locations would be provided with RTUs for operation of MOVs from MCS in
case of exigencies.
5.6.6.4 Station Control Centre (SCC) would have workstations as operator interface to the
station instrumentation and control system, on dual local area network (LAN) in client
server mode.
5.6.6.5 230 V UPS system with dual battery back up (4 hours) would be provided at all the
attended stations.
5.6.7
Telecommunication system
5.6.7.1 A dedicated state of the art OFC based, SDH communication system with 99.9%
availability along with IP/E1 based new EPABX Systems at all attended stations. This
would be over and above existing fibre of CTMPL (in common ROW stretch) serving
as a mutual back-up medium for both the pipelines.
5.6.7.2 RTU data & CCTV requirements of SV locations all along the LPG pipeline shall be
catered by extending the network connectivity using additional/ spare fibre from the
nearest attended station.
5.6.7.3 Network management system has been considered for the SDH network at Ennore and
Madurai.
5.6.7.4 Master Network Video Recorder (NVR) at Ennore with failover Network Video
Recorder (NVR) at Trichy. The Control Centre for CCTV System with Network Video
Recorder (NVR) (with client PC) shall be at all attended stations.
5.6.7.5 Dedicated power systems (Battery charger + battery bank), solar power system and
electronic perimeter security system considered at all locations.
5.6.7.6 VHF System, consisting of one base Station with 4 hand-held sets for delivery stations
and one base Station with 6 hand-held sets for pumping station at Ennore has been
considered.
Page 25 of 38
5.6.8
Supervisory Control and Data Acquisition (SCADA) System
5.6.8.1 The telesupervisory system for the proposed pipeline is envisaged to have dual hot
stand-by computer system in client-server mode for monitoring and control of pipeline
from Master Control Station (MCS) envisaged at Ennore. In the event of failure of the
duty machine, the hot stand-by machine will take over the role of the duty machine
instantaneously, without affecting the operational continuity and loss of data, thereby
ensuring high reliability of the system. The telesupervisory system will work in
Master-Slave configuration, having its slave stations at attended stations and at block
valve locations, installed along the entire pipeline network. The master station shall be
interfaced with slave stations over OFC telecom system over Wide Area Network for
data acquisition and control.
5.6.8.2 MCS at Ennore would be equipped with SCADA software running under multiprogramming, multi-tasking real time operating system environment. The SCADA
software would have features for control & monitoring of all locations including Block
valves. Leak Detection system shall be provided and the Leak Detection Software shall
run in a separate machine at MCS. This package will enable the operator to take
optimal control actions and thus ensure the safety and security of the pipeline network.
Typical MCS, SCC, T-Point configurations and RTU configuration at RCP/SV are
indicated in Annexure-IV(a) to IV(d).
5.7
Operation Philosophy
5.7.1
Operation of the pipeline would predominantly be through heart-cut mode.
5.8
Implementation Methodology
5.8.1
It is proposed to take up execution of the project through in-house expertise.
5.9
Statutory Clearances
5.9.1
Suitable actions will be taken for obtaining MoE&F clearance and other statutory
clearances for the proposed pipeline from concerned authorities, as applicable.
5.10
Construction Schedule
5.10.1
The proposed scheme is expected to be completed in a period of about 30 months after

receipt of statutory clearances. The schedule is shown in Annexure-V.
Page 26 of 38
5.11
Manpower Requirement
5.11.1
The manpower requirement would be about 82 during construction phase and about 76
for operation of the pipeline, excluding Line Patrolmen (LPM). The requirement of
LPM for the new portion of right-of-way is envisaged to be outsourced.
Page 27 of 38
CHAPTER-VI
6.0
CAPITAL COST
6.1
The pipeline system from Ennore to Madurai is estimated to cost Rs.711 crore,
including a foreign exchange component of Rs.202 crore, at December 2012 price level.
This includes Rs.60 lakh required for modifications in unloading bays at Trichy and
Madurai bottling plants for their use as loading bays.
6.2
The project cost for pipeline facilities has been estimated on the basis of the following.
Cost actually incurred in the past with appropriate escalation
Establishing physical requirements, preliminary specifications and in-house cost

data
Experience of virtually identical projects elsewhere to establish physical

requirements and cost
Experience of slightly different projects adjusted approximately to establish

physical requirements and budgetary quotations
Experience of similar projects in value/terms adjusted for price difference by past

experience and escalation data
6.3
Survey and field engineering
6.3.1
This cost includes the cost of surveys, sub-soil investigation & field engineering.
6.4
Land acquisition, ROW and crop compensation
6.4.1
Land requirement for T-Point locations, SVs/RCPs etc. has been taken on the basis of
permanent land acquisition. ROW compensation and crop compensation has been
suitably considered.
6.4.2
Cost of colony has not been considered as the pumping stations/ delivery stations are
envisaged near urban/ semi urban areas.
6.5
Project management & engineering, insurance
6.5.1
The proposed scheme is expected to be completed in a period of 30 months after

receipt of statutory clearances. The cost of project management & engineering is
estimated on the basis of this envisaged time schedule. The manpower requirement
Page 28 of 38
during construction phase would be about 82. However, it would be reviewed again
before start of construction activities.
6.6
Mainline Pipes & Materials
6.6.1
The cost of pipe and coating has been considered as per the latest data available. The
cost of mainline materials required such as casing pipe, coating and wrapping materials,
valves etc. has been estimated on the basis of budgetary offers and cost actually
incurred in recent past on similar items.
6.7
Mainline Construction
6.7.1
The cost of mainline construction has been estimated on the basis of the cost incurred in
similar project executed elsewhere, suitably adjusted to bring it to December 2012 price
level.
6.8
Pump Station and Terminal
6.8.1
The cost under this head includes the cost of mechanical, civil, electrical and
instrumentation & control facilities which mainly comprise the mainline pumping units
including prime movers, valves, scraper barrels, fire alarm & detection system, fire
hydrant network & related facilities, Power-cum-Motor Control Center, PLC based
control system, control buildings etc. including the erection and installation of requisite
facilities.
For facilitating nodal movement to linked Bottling plants from Trichy and Madurai, the
existing unloading bays would be utilized as loading bays.
6.9
Cathodic Protection
6.9.1
This includes the cost of materials required for temporary and permanent cathodic
protection, installation & commissioning of equipment/materials, CP rectifier units,
ground beds, cable etc. Estimates are based on budgetary offers and the rates from
similar projects executed in the recent past.
6.10
Telecommunication and Telesupervisory System
6.10.1
Cost estimates are based on budgetary offers/earlier purchase orders, adjusted suitably.
6.11
Escalation
6.11.1
No provision has been made for price escalation during the period of execution of the
project and, as far as possible, the estimates have been prepared on the basis of the costs
Page 29 of 38
prevalent in December 2012. However, provision for contingencies to the tune of 5%

has been kept in the cost estimates, which is considered to be adequate to cover
unforeseen factors.
Summary of capital cost is given in Attachment-6.1.
Page 30 of 38
Attachment-6.1
Ennore-Trichy-Madurai LPG Pipeline

Capital Cost
(December 2012 price level)
(Rs. in Lakh)
No.
Description of Item
FE
Rupees
Total
A. Pipeline Facilities
1.
Survey & Field Engineering
588
588
2.
Land Acquisition, ROW & Crop

Compensation
1309
1309*
3.
Mainline Pipes
15890
6975
22865
4.
Mainline Materials
534
405
939
5.
12805
12805
6.
Pump Station and Terminal
2783
13993
16776
7.
Cathodic Protection
46
1210
1256
8.
Telecommunication & Telesupervisory
4048
4048
19253
41333
60586
963
2067
3030
Project Management and

Engineering, Insurance
3817
3817
Interest During Construction
3602
3602
20216
50819
71035
60
60
20216
202
50879
509
71095
711
Sub-total
Contingencies
Total (Pipelines Facilities)

B.
Modifications in Marketing Facilities

Total (A+B)
Say, Rs. crore
Exchange Rates: 1 US $ = Rs.54.61

*Including cost of land i.e. Rs.628 Lakh
Page 31 of 38
CHAPTER-VII
7.0
OPERATING COST
7.1
Operating cost of the pipeline system includes the cost of power for mainline pumping
units, utilities, consumables, salaries and wages, administrative overheads, repair and
maintenance etc.
The operating cost corresponding to throughput of 0.9 MMTPA is estimated to be about
Rs.30 crore per annum at December 2012 price level.
Details of the operating cost are given in Attachment-7.1.
7.2
Basis of estimation
7.2.1
Fuel/Power (Electricity)
The project envisages motor driven pumping units at Ennore. For the purpose of
operating cost calculations, tariff for electricity has been considered @ Rs.5.00 per unit.
7.2.2
Utilities
7.2.2.1 Power
Power is also required for operation of the auxiliaries & controls etc. and for
illumination at the stations. Requirement of power is planned to be drawn from State
Grid or by increasing contract demand of existing electricity connections at bottling
plants, if required, and extending to pipeline facilities.
7.2.2.2 Water
There is no major requirement of water for operation of the pipeline system. Water for
fire-fighting will be drawn from the Fire water network of existing facilities of
Marketing.
7.2.3
Manpower
7.2.3.1 The cost towards salaries and wages shown against the labour component in the
operating cost is based on the estimated manpower requirement on the existing scales of
pay and allowances. The manpower requirement, which would be around 82 during
construction and around 76 for operation phase, has been worked out on the basis of
Page 32 of 38
prevailing norms and practices. The requirement of manpower is expected to be met

through internal deployment as well as by induction of competent personnel, who will
be trained to operate the system.
7.2.4
Repair and Maintenance
7.2.4.1 Repair and maintenance of the mainline has been considered to be about 1% of the
investment in the mainline. Similarly, repair and maintenance of the stations has been
considered to be about 2% of the investment on stations, telecommunication &
telesupervisory system.
7.2.5
General Administration Expenses
7.2.5.1 The cost under this head covers management expenses including security services,
insurance of facilities etc. being proposed in the pipeline system.
Page 33 of 38
Attachment-7.1

Operating Cost
(December 2012 price level)

(Rs. in Lakh)
S. No.
Description of Item
1.
Power (for prime movers)
2.
Utilities
Cost per Annum

323
Power & Water

3.
Manpower
4.
Repair & Maintenance
5.
29
1176
a) Mainline
379
b) Pump Station and others
416
Other Expenses
a) General Administration Expenses
646
b) Insurances
55
Total
3024
(Say, Rs. 30 crore)
Page 34 of 38
CHAPTER - VIII
8.0
FINANCIAL ANALYSIS
8.1
Project Financing
8.1.1
Capital cost of the project is considered to be financed through internal

resources/commercial borrowings. For the purpose of financial analysis, Debt:Equity
ratio of 1:1 has been considered, with interest rate of 10.75% per annum and repayment
in 8 equal installments, with one year moratorium from the date of commissioning.
Requirement of working capital will be met through internal resources.
8.2
Financial Analysis
8.2.1
Financial analysis for the proposed pipeline system has been carried out taking into
account the following.
Capital cost of the pipeline and its operation for 15 years / 25 years
Throughput as indicated in the optimization study for 2016-17 and 2021-22
Corporate savings, as assessed in the optimization study, as Revenue
Benefit due to lower transit loss in pipeline transportation compared to losses

permitted for transportation through road tankers
Savings in the loading and decanting charges associated with road tankers on
notional basis
Results of the financial analysis are as under.
8.2.2
15 years operation
25 years operation
ROI (%)
16.2
17.5
ROE (%)
19.8
21.1
Sensitivity analysis has also been carried out, the results of which are as under.
15 years operation
Case
ROI (%) ROE (%)
25 years operation
ROI (%)
ROE (%)
Increase in capital cost by 10%
14.8
17.6
16.2
19.1
Increase in operating cost by 10%
16.0
19.4
17.3
20.7
Page 35 of 38
15 years operation
Case
8.2.3
ROI (%) ROE (%)
25 years operation
ROI (%)
ROE (%)
Decrease in throughput by 10%
14.2
16.8
15.8
18.5
All the above together
12.6
14.3
14.3
16.3
Economics of Ennore-Trichy Pipeline
8.2.3.1 If pipeline is terminated up to Trichy, the results of financial analysis would be as

under.
8.2.4
15 years operation
25 years operation
ROI (%)
18.0
19.2
ROE (%)
22.1
23.2
It is seen from the above that the proposed pipeline is viable under most of the
scenarios considering the prevailing hurdle rate of 13%. The pipeline will facilitate
cost-effective transportation of LPG from Ennore to LPG bottling plants at
Chengalpet, Pondicherry, Trichy and Madurai.
Page 36 of 38
CHAPTER IX
9.0
CONCLUSIONS AND RECOMMENDATIONS
9.1
With commissioning of IPPLs LPG import terminal at Ennore, which was set up
primarily to meet the deficit of LPG in Tamil Nadu, requirement of domestic category
of LPG for various bottling plants in Tamil Nadu, Cuddapah in A.P. and part
requirement of Devanagonthi is met from Ennore by road tankers.
9.2
Most of the LPG bottling plants in Tamil Nadu are situated at considerable distance
from Ennore. Optimization study indicates that there would be considerable savings by
laying a LPG pipeline from Ennore to Madurai via Chengalpet, Pondicherry and
Trichy, which would substitute road movement of LPG ex-Ennore to these bottling
plants.
9.3
The proposed pipeline will facilitate cost-effective transportation of LPG from Ennore
to different bottling plants in the state of Tamil Nadu and also at Pondicherry in a safe,
cost-effective, environment-friendly and reliable manner. The pipeline would replace
significant movement of LPG by road tankers and would thus provide relief from
problems associated therewith
9.4
In view of the above, it is proposed to lay Ennore-Trichy-Madurai LPG pipeline which

would originate at Ennore and terminate at existing Madurai bottling plant, providing
pipeline connectivity en route to the existing LPG bottling plants at Chengalpet,
Pondicherry and Trichy.
9.5
Results of the financial analysis indicate that the proposed LPG pipeline is viable
considering the prevailing hurdle rate of 13%.
9.6
Keeping the above in view, it is recommended to consider this pipeline at an estimated

cost of Rs.711 crore including a foreign exchange component of Rs.202 crore, at
December 2012 price level.
9.7
The project is estimated to be completed in a period of about 30 months after receipt of

all statutory clearances.
Page 37 of 38
9.8
Accordingly, this report is submitted for approval of the Board to the above
recommendations.
***
Page 38 of 38
ANNEXURES

Hydraulic Gradient
Considering Heart Cut Operation
2800
2600
MAOP
2400
2200
2000
1723 MCL
1800
1600
Head (MCL
L)
1400
1200
00
RH-1270 MCL
1000
RH-946 MCL
800
600
RH-464 MCL
400
200
RH- 222 MCL
0
0
50
100
150
200
250
300
350
400
450
500
550
Chainage (km)
Ennore
Chengalpet
T Point to Pondicherry
T-Point to Trichy
Madurai
Chainage (Km) 0
125
226
419
541
Altitude (M)
22
64
128
204
Annexure-I
Station

Schematic Flow Diagram
g
10.75 OD
10 75 OD
10.75
From
IPPL Ennore
Storage
Tanks
T-Point for Pondicherry

(Ch.226 km)
(Ch. 0 km)
10.75 OD
(Ch. 125 km)
Ennore
8.625 OD
Chengalpet
8.625 OD
Madurai
(Ch. 541 km)
8.625 OD
T-Point for Trichy

(Ch.419 km)
Pondicherry
(55 km ex T-Point)
Pumping Unit
(Operating)
Pumping Unit
(Stand By)
Trichy
Scraper Barrel
Valves
Marketing Storage Tanks
(19 km ex T-Point)
Annex
xure - II
LEGEND
Annexure-III

Route Map
Delivery Station
Pump Station
Proposed LPG Pipeline

Typical
yp
SCC Configuration
g
DUAL REDUNDANT OPERATOR
WORKSTATION
DUAL REDUNDANT SCC

SERVERS
STATION-IN-CHARGE
TERMINAL
ENGINEERING TERMINAL
DUAL REDUNDANT
100 MBPS ETHERNET LAN
FRONT END SERVER

ROUTER
LASERJET
PRINTER
TO MCS
DUAL REDUNDANT
PLC 32 BIT
DOT MATRIX
PRINTER
TO RCP LOCATIONS
FLOW
COMPUTER
Chengalpet, Pondicherry , Trichy and Madurai Stations
Annexure
e-IV(a)
FIELD
DEVICES

Typical
yp
MCS Configuration
g
at Ennore
DUAL REDUNDANT SCADA
MCS SERVERS
DUAL REDUNDANT SCCOPERATOR

WORKSTATION
PLASMA DISPLAY
PANEL
50TFT
50
TFT
Screen
Display
APPLICATION
SERVER
ENGINEERING
TERMINAL
SIC
TERMINAL
HISTORIAN
SERVER
DUAL REDUNDANT
100 MBPS ETHERNET LAN
FRONT END SERVER

ROUTER
LASERJET
PRINTER
TO SCCs
DOT MATRIX
PRINTER
DUAL REDUNDANT MCSOPERATOR

WORKSTATION
TO RCP LOCATIONS
FLOW
COMPUTER
Annexure
e-IV(b)
FIELD
DEVICES

Typical
yp
Configuration
g
at T-Point Locations
-40 V to 60 V DC
COMMN.
COMMN.
-48 V nominal
OV
VER DATA CHANNEL
SCC / MCS
DC TO DC
CONVERTER
FIELD DEVICES
Annexure
e-IV(c)
FLOW
COMPUTER

Typical
yp
RTU Configurations
g
at RCP/SV Locations
SCC / MCS
COMMN.
OV
VER DATA CH
HANNEL
-48 V nominal
-40 V to 60 V DC
DC TO DC
CONVERTER
FIELD DEVICES
Annexure
e-IV(d)

Project Completion Schedule
1
S.No. MONTHS--->
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
ACTIVITY
Design and Detailed Engineering
Survey, Land/ RoW Acquisition &

Payment of Crop Compensation
Procurement of Pipes and Mainline

Materials
Procurement of
Station Facilities
Construction of Station Facilities
Cathoic Protection Works
Telecom,
Telesupervisory
SCADA works
Progressive Commissioning
Materials
for
and
LEGEND
COMMISSIONING
STATION CONSTRUCTION
SCADA WORKS
M/L MATERIALS & COA
PCP WORKS
MAINLINE CONSTRUCTIO
STATION MATERIALS
NOTE : Overall completion period for the project with progressive commissioning of facilities has been envisaged as 30 months from the date of obtaining relevant statutory clearances.
Annexure-V
DETAILED ENGINEERING
LAND / ROW & CROP COMPENSA

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Need and Justification

Conclusions and Recommendations

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

As these bottling plants are situated at considerable distance from Ennore, an

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

Findings of the optimization study of September 2012 were as under.

Delivery locations directly

Projected Throughput and Savings

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

NEED AND JUSTIFICATION

South India Demand

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

Most of domestic requirement of LPG at IOCs bottling plants in Tamil Nadu,

Nodal movement from Trichy

Nodal movement from Madurai

Bottling Plant at Trichy

Bottling Plant at Madurai

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

In view of the above, it is proposed to lay Ennore-Trichy-Madurai LPG pipeline for

4.2.1 Configuration of the pipeline system broadly comprises the following.

419 km long, 10.75 OD x 0.25 WT pipeline section from Ennore to T-Point

55 km long, 8.625 OD x 0.25 WT branch pipeline from T-point to

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

2 booster pumps and 3 motor-driven mainline pumping units with variable

4.3.1 Operation of the pipeline would predominantly be through heart-cut mode.

4.4.1 It is proposed to take up execution of the project through in-house expertise.

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

maintenance etc. The operating cost corresponding to throughput of 0.9 MMTPA is

Capital cost of the project is considered to be financed through internal

Throughput as indicated in the optimization study for 2016-17 and 2021-22

Benefit due to lower transit loss in pipeline transportation compared to losses

Results of the financial analysis are as under.

Increase in capital cost by 10%

Increase in operating cost by 10%

Decrease in throughput by 10%

All the above together

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

Economics of Ennore-Trichy Pipeline

Conclusions and Recommendations

Keeping the above in view, it is recommended to lay Ennore-Trichy-Madurai LPG

Executive SummaryEnnore-Trichy-Madurai LPG Pipeline

DFR Ennore-Trichy-Madurai LPG Pipeline

requirement of Devanagonthi bottling plant in Karnataka. Requirement of CPCLs

As these bottling plants are situated at considerable distance from Ennore, an

Based on the above analysis, CO(Optimisation) undertook another study in January

DFR Ennore-Trichy-Madurai LPG Pipeline

marginal difference in Return-on-Investment (RoI) for pipeline up to Trichy vis--vis

DFR Ennore-Trichy-Madurai LPG Pipeline

Accordingly, IOC Board accorded first-stage approval to the proposal of laying a

Findings of the optimization study of September 2012 were as under.

DFR Ennore-Trichy-Madurai LPG Pipeline

Delivery locations directly

Projected Throughput and Savings

DFR Ennore-Trichy-Madurai LPG Pipeline

This study concluded that Ennore-Trichy pipeline and Ennore-Trichy-Madurai pipeline

Based on the above analysis, CO(Optimisation) undertook another study in January