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New Pipe Mill to Provide Captive Supply for Essar Construction
10/08/2008 - Essar Construction (India) prepares to take up turnkey projects as Essar’s Rs 800-crore saw pipe mill at Hazira nears completion.
Essar Construction (India) Ltd (ECIL), which is primarily into in laying cross-country oil, gas and water pipelines, is preparing to take up turnkey projects, as Essar’s Rs 800-crore saw pipe mill at Hazira nears completion.
Prior to startup of the new saw pipe mill, Essar Construction has been procuring pipes from outside. Once the Hazira facility is commissioned by March 2009, the company will have a captive supply of pipes that will enable it to take up EPC projects on a turnkey basis.
The pipe mill facility, which will have a capacity of about 0.6 million tonnes, will comprise three mills that will be capable of producing pipes ranging in diameter from 16 to 100 inches that can be used for transportation of oil, gas and water products. Once it is started up, the Hazira facility will join the ranks of major pipeline producers such as Gujarat Wellspun—presently India’s biggest with a capacity of one million tonnes—as well as PSL, Man Industries and Jindal Saw Pipes.
The new pipe mill will utilize steel produced by Essar Group’s Hazira steel plant. According to the company, the captive supply of pipes will allow the company to sharpen its focus on overseas projects, especially in West Asia, on a turnkey basis.
“Oil companies generally procure their own pipes and supply us for laying the pipeline,” said V.N. Paradkar, ECIL’s CEO. “But for other companies, we have to depend on the market for supplies, which usually takes six to eight months from the day we place the order. Once our own facility comes up, we will have assured supply of pipelines to enable us to handle EPC contracts,” he said.
ECIL, which has so far executed about 3,000 km of pipelines, is in the process of executing another 1000 km of pipeline projects. It was recently awarded a Rs 410-crore order from GAIL for laying 333 km of pipeline for the 500-km Dadri to Vijaipur (MP) pipeline project. The major projects executed by the company include the Rs 339-crore Bharuch-Jamnagar gas pipeline project involving a pipeline length of 109 km, the 147-km long Dahej-Uran pipeline for GAIL and the Rs 122-crore Mumbai-Delhi project for HPCL.
The company is executing projects worth about Rs 750 crore, including the Rs 221-crore Bharuch-Jamnagar pipeline project-spread 2, the Rs 235-crore Ambatovy nickel ore slurry pipeline project that is scheduled to go on stream by June 2009 and the Vadinar-Bina project for Bharat Oman Refinery Ltd.
“All the projects currently under execution will be completed by December 2009. We see that at any time we have on hand orders for 1000 km of work,” the company’s CEO said.
As part of its increased focus on overseas projects, ECIL is in the race for a $3005-million water transmission system in Saudi Arabia.
Essar Construction (India) Ltd is part of the Essar Group.
