India’s state-run oil refineries are set to fully operationalise the world’s longest liquefied petroleum gas (LPG) pipeline by June, Bloomberg reported on Friday.
This significant development is expected to drastically reduce the cost of transporting LPG across the country.
The pipeline will facilitate the efficient and safe movement of LPG, eliminating the need for extensive road transportation by tanker trucks.
Pipeline to cut down logistical expenses
This shift will not only cut down on logistical expenses but also play a crucial role in preventing deadly road accidents that are often associated with the transportation of hazardous materials like LPG.
By ensuring a smoother and safer supply chain, the commissioning of this pipeline represents a major step forward for India’s energy sector and overall road safety.
“This will be a game changer in the LPG supply chain,” N. Senthil Kumar, director of pipelines at Indian Oil Corp was quoted in the report.
It’s like putting LPG on a conveyor belt.
The $1.3 billion project aims to construct a vast network of pipelines that will transport fuel directly from refineries to bottling plants across the country.
This ambitious undertaking is expected to drastically reduce the reliance on hundreds of trucks that currently traverse the nation’s roads, transporting fuel.
This shift from road to pipeline transportation is anticipated to significantly decrease the risk of accidents associated with the trucking industry.
Dangers of fuel transportation by road
The urgency of this project is underscored by recent incidents that highlight the dangers of fuel transportation by road.
In Coimbatore last month, a tanker overturned, causing a partial shutdown of the southern city.
This incident disrupted daily life and economic activity, causing inconvenience and financial losses.
In a more tragic event in December, a collision between a truck and an Indian Oil vehicle in Jaipur resulted in a devastating loss of life and extensive property damage.
Twenty people were killed, 45 were injured, and three dozen vehicles were damaged in the accident.
These incidents serve as grim reminders of the potential consequences of relying on road transportation for hazardous materials like fuel.
IHB, a joint venture formed by Indian Oil, Bharat Petroleum Corp., and Hindustan Petroleum Corp., is constructing a 2,800-kilometer pipeline stretching from Kandla on the west coast to Gorakhpur in the north.
According to Kumar, who is also the chairman of the joint venture, the first phase of the pipeline will be commissioned in March, with full operation expected by mid-year.
India’s total LPG demand is about 8.3 million tons annually.
Pipeline to meet 25% of demand
The proposed pipeline network will be able to transport 25% of this demand, which will likely lead to a significant reduction in transportation costs.
Currently, 70% of India’s bottling plants receive LPG by trucks.
The country’s Petroleum and Natural Gas Regulatory Board has been pushing refiners to build more pipelines to manage the increasing LPG volumes and prevent major road disasters.
Demand for LPG, used mainly for home cooking, has increased by 80% over the last ten years, reaching 29.6 million tons in the fiscal year ending in March 2024.
This growth surpasses the 47% increase in demand for refined oil products over the same period.
The surge in LPG sales is partly attributed to government discounts aimed at encouraging low-income households to switch from burning polluting biomass to LPG for cooking.
The pipeline project was announced in 2019 and has faced numerous delays, including pandemic-related lockdowns and sourcing materials due to the war in Ukraine.
Despite these challenges, India’s LPG pipeline network currently spans almost 5,000 kilometers.
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