New Delhi: Cairn India's Rajasthan crude oil will begin flowing from 2009 but the company and its 30 per cent partner ONGC have already found customers in the form of both private and public sector oil retailing companies.
Private sector refiners Reliance and Essar Oil and state-run firms Bharat Petroleum and Hindustan Petroleum have evinced interest in buying Cairn India's Rajasthan crude oil.
"BPCL has evinced interest in making Cairn's Rajasthan crude the base crude for its upcoming Bina refinery in Madhya Pradesh. It has said it can take up to 100,000 barrels per day in the 6 million tons Bina refinery," PTI quoted an industry source.
Reliance wants 30,000 barrels per day for its existing Jamnagar refinery and a similar quantity in the upcoming refinery of Reliance Petroleum. Essar Oil can take between 30,000 to 40,000 bpd crude in its Vadinar refinery.
BPCL and HPCL can taken 30,000 bpd Rajasthan crude in their Mumbai refineries after a pipeline is laid from Barmer district in Rajasthan to a port on Gujarat coast, from where the oil can be shipped, the source said.
The source said Cairn's Rajasthan crude is a sweet (low sulphur) and waxy crude with an API gravity of around 27 and pour point just over 40 degrees Celsius. In the British Petroleum crude assay database, there are 94 crudes considered heavier than the Rajasthan crude and 31 crude that are more viscous out of a total of more than 450 types of crude oils.
Cairn wants to benchmark its crude to market price of Duri (58 per cent) and Widhuri (42 per cent) crudes with adjustments to account for quality of Rajasthan crude.
"In 2006, the Duri/Widhuri averaged $58.30 per barrel, much lower than IOC's import price of $66.24 per barrel (30 per cent of Bonny Light crude and 70 per cent of Oman/Dubai crude)," the source said.
Mangalore Refinery, which is the official offtaker of Cairn crude, had suggested a price of Dubai minus $3.50 per barrel, which came to $57.98 per barrel in 2006. This was not much different from Cairn's price formula.
Cairn is ready to start production in small quantities from its Saraswati field and it waiting for finalising of oil sales. In another 12 months, it can put Raageshwari oil field to production but the giant Mangala field would come in 2009 when output peaks to 150,000 barrels per day.
Cairn and ONGC together plan to lay a 340-km line to Indian Oil's (IOC) Viramgam pipeline terminal in Gujarat.
Viramgam is connected by pipelines to IOC's Koyali and Panipat refineries, which can also be potential customers of Rajasthan crude taking 20,000 bpd each.
Smaller pipeline can be built to the coast, or Jamnagar where Reliance Industries and Essar Oil have refineries.
Rajasthan fields at peak can produce 150,000 bpd of oil.
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