Jindal SAW, India’s leading manufacturer of submerged arc welded (SAW) and spiral pipes for the energy transportation sector, has bagged the highest quantum of 55,000 tonnes of line pipes in the reverse auction conducted by the Government of India (GoI) to source suppliers for Indian Oil’s INR 9,028-crore new crude pipeline project.
Around 250,000 tonnes of API grade material was sought through the tender.
It may be recalled that Indian Oil Corporation (IOC), India’s largest state-controlled refiner by capacity, is building a new crude pipeline system from western India’s Mundra Port to its Panipat refinery and the investment proposal received a green signal in December last calendar. The new pipeline will have a capacity of 17.5 mnt/annum (350,000 b/d) at an estimated cost of about INR 9,028 crore ($1.19bn), which will also include 9 crude oil tanks of 60,000 kilolitres each at Mundra. The company aims to raise the capacity of the Panipat refinery from 15 mnt per annum (mtpa) to 25 mtpa by the second quarter of 2024-25 and this will be synchronised with the commissioning of the Panipat refinery expansion project.
Five L1 bidders
Several companies participated in the tender floated by GoI. SteelMint understands from credible sources that five companies emerged as L1 bidders in the tender with Jindal Saw emerging as the leading one. It is also a manufacturer of carbon, alloy and seamless pipes and tubes for industrial applications; and ductile iron (DI) pipes and fittings for water and wastewater transportation. It will supply 55,000 tonnes of line pipes.
Four other companies participated in the tender floated by GoI, SteelMint understands from credible sources who also came out as L1 bidders.
MAN Industries, a prominent player in manufacturers of large diameter carbon steel pipes, bagged the order to supply 54,000 tonnes of line pipes while Welspun Corp Ltd, the second largest manufacturer of large diameter pipes in the world, bagged the order to supply 48,000 tonnes of line pipes.
That apart, AM/NS India, the integrated flat carbon steel manufacturer, is also amongst the L1 bidders which will supply around 46,000 tonnes of line pipes.
Surya Roshni, with its manufacturing facility at Bhuj for exports and manufacturing of ERW, spiral and API pipes, bagged the order to supply 39,000 tonnes of line pipes.
Indian Oil Corporation is targeting to increase its crude throughout by 25%, or about 3,50,000 b/d in the next four years through a series of four refinery expansions, including Panipat.
Korean supply a challenge
Pipe manufacturers depend quite extensively on imports from South Korea for sourcing API grade HRCs and plates for supplying to these projects. However, with the EU now redistributing import quotas, Korean mills are extensively exploring the EU market for supplying API HRCs and plates on the back of better realisation. Pipe manufacturers are facing challenges in sourcing material from Korea, as offers to India have been very limited, a reliable source informed SteelMint.
They are also facing challenges in purchasing X-70 API grade HRCs and plates from domestic manufacturers on account of surging raw material prices.
GoI has planned to invest around $60 billion in the natural gas infrastructure by 2024 to increase the share of the energy mix from 6% to 15% by 2025. India aims to increase its pipelines to 30,000 kms by 2025.
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