Reliance requests access to public ATF infrastructure
OIL & GAS

Reliance requests access to public ATF infrastructure

Access to pipelines and storages that public sector oil companies have built over the years for supplying jet fuel (ATF) from depots and oil refineries to airports has been sought by Reliance Industries Ltd. The company contributes to four percent of India's aviation turbine fuel (ATF) production and wants access to storage depots outside the Delhi airport as well as to pipelines leading to Mumbai, Bengaluru, and Hyderabad airports.

Compared to the supply made by state-owned companies, it now provides ATF in tiny numbers. In order to increase competition and lower fuel costs, the company recommended in its comments to the proposed regulation of the oil regulator PNGRB that all current and prospective airports receive their ATF via pipelines that are accessible to all suppliers.

Although the fuel market remains free, state-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd. (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL) have spent decades building pipelines that feed aircraft at the nation's largest airports.

Reliance, which has been pursuing access to pipelines supplying ATF to airports for over a decade, asserted that the common carrier pipeline scope should include associated storage facilities and pumping stations at off-site oil terminal facilities, as they are integral to the ATF supply chain.

According to Reliance, this inclusion would foster a competitive market for ATF supply and distribution to airport on-site storage facilities. Out of the 17.12 million metric tonnes of aviation turbine fuel (ATF) produced by public and private sector refineries, 8.2 million metric tonnes are consumed domestically, with the remainder exported. Reliance's twin refineries at Jamnagar produce nearly 5 million metric tonnes of ATF, a significant portion of which is exported.

As more people fly, the demand for ATF in India is rising by double digits. In the financial year that concluded on March 31, 2024, it increased by 11.8%. At the largest airline hub in the nation, Delhi International Airport, IOC and BPCL provide the majority of the 2.7 million kiloliters of jet fuel required annually. This is so because they own the storage facilities outside the airport in addition to the pipeline. Pipelines leading into the airport are accessible to other parties, although they are limited in what they can supply due to a lack of storage.

Reliance stated that it was necessary to designate off-site ATF storage facilities at Bijwasan as common user facilities. This, they explained, would allow other suppliers or interested airlines to store ATF at the Bijwasan common user facility via rail wagons and utilise the common carrier pipeline from Bijwasan.

The company wanted the two ATF pipelines owned by HPCL and BPCL, which transport fuel from the two PSU refineries in Mumbai, the second-largest hub, to be managed on a common carrier basis, meaning that other businesses would have the freedom to utilise them.

Reliance wanted a tie-in connection to the common carrier pipeline from the upcoming ATF tank farm at MRPL's marketing terminal at Devangonthi for Bengaluru, which is home to the third-largest airport in the nation. This was because bringing products by tanker truck to the airport fuel farm was not practical due to traffic issues. Reliance wanted the pipeline's capacity to be extended in order to handle future demand and provide access to the storage tanks and rail wagon unloading facilities at Malkapur. Currently, the pipeline supply to the Hyderabad airport is handled on a common carrier open access basis. Similar recommendations were made for the airports in Kochi and Lucknow.

Reliance conveyed that pipelines represent an efficient, cost-effective, and secure means of bulk transportation from supply installations to demand centres. They expressed that the proposed measures by PNGRB would stimulate competition, ensure adherence to environmental and safety regulations, and prevent unnecessary investments by optimising the utilisation of product storage and pipeline infrastructure. Reliance noted that such competition would be advantageous for airline companies, which allocate a significant portion of their expenses to fuel costs.

For the development of aviation turbine fuel (ATF) pipelines connecting various greenfield and brownfield existing and upcoming airports in India, the Petroleum and Natural Gas Regulatory Board (PNGRB) had invited comments from the general public and various stakeholders, including oil marketing companies (OMCs), airport operators, and airline operators.

According to Reliance, pipelines offer the most economical mode of liquid fuel transportation compared to costly road transport. In a notice inviting comments in February, the regulator acknowledged the substantial share of the ATF price in airline costs and stated that the provision of pipelines could potentially reduce the cost of air travel.

Reliance further mentioned that this initiative would allow other oil marketing companies (OMCs) to utilise the pipelines for transporting their products, thereby fostering competitiveness within the industry.

Access to pipelines and storages that public sector oil companies have built over the years for supplying jet fuel (ATF) from depots and oil refineries to airports has been sought by Reliance Industries Ltd. The company contributes to four percent of India's aviation turbine fuel (ATF) production and wants access to storage depots outside the Delhi airport as well as to pipelines leading to Mumbai, Bengaluru, and Hyderabad airports. Compared to the supply made by state-owned companies, it now provides ATF in tiny numbers. In order to increase competition and lower fuel costs, the company recommended in its comments to the proposed regulation of the oil regulator PNGRB that all current and prospective airports receive their ATF via pipelines that are accessible to all suppliers. Although the fuel market remains free, state-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd. (BPCL), and Hindustan Petroleum Corporation Ltd. (HPCL) have spent decades building pipelines that feed aircraft at the nation's largest airports. Reliance, which has been pursuing access to pipelines supplying ATF to airports for over a decade, asserted that the common carrier pipeline scope should include associated storage facilities and pumping stations at off-site oil terminal facilities, as they are integral to the ATF supply chain. According to Reliance, this inclusion would foster a competitive market for ATF supply and distribution to airport on-site storage facilities. Out of the 17.12 million metric tonnes of aviation turbine fuel (ATF) produced by public and private sector refineries, 8.2 million metric tonnes are consumed domestically, with the remainder exported. Reliance's twin refineries at Jamnagar produce nearly 5 million metric tonnes of ATF, a significant portion of which is exported. As more people fly, the demand for ATF in India is rising by double digits. In the financial year that concluded on March 31, 2024, it increased by 11.8%. At the largest airline hub in the nation, Delhi International Airport, IOC and BPCL provide the majority of the 2.7 million kiloliters of jet fuel required annually. This is so because they own the storage facilities outside the airport in addition to the pipeline. Pipelines leading into the airport are accessible to other parties, although they are limited in what they can supply due to a lack of storage. Reliance stated that it was necessary to designate off-site ATF storage facilities at Bijwasan as common user facilities. This, they explained, would allow other suppliers or interested airlines to store ATF at the Bijwasan common user facility via rail wagons and utilise the common carrier pipeline from Bijwasan. The company wanted the two ATF pipelines owned by HPCL and BPCL, which transport fuel from the two PSU refineries in Mumbai, the second-largest hub, to be managed on a common carrier basis, meaning that other businesses would have the freedom to utilise them. Reliance wanted a tie-in connection to the common carrier pipeline from the upcoming ATF tank farm at MRPL's marketing terminal at Devangonthi for Bengaluru, which is home to the third-largest airport in the nation. This was because bringing products by tanker truck to the airport fuel farm was not practical due to traffic issues. Reliance wanted the pipeline's capacity to be extended in order to handle future demand and provide access to the storage tanks and rail wagon unloading facilities at Malkapur. Currently, the pipeline supply to the Hyderabad airport is handled on a common carrier open access basis. Similar recommendations were made for the airports in Kochi and Lucknow. Reliance conveyed that pipelines represent an efficient, cost-effective, and secure means of bulk transportation from supply installations to demand centres. They expressed that the proposed measures by PNGRB would stimulate competition, ensure adherence to environmental and safety regulations, and prevent unnecessary investments by optimising the utilisation of product storage and pipeline infrastructure. Reliance noted that such competition would be advantageous for airline companies, which allocate a significant portion of their expenses to fuel costs. For the development of aviation turbine fuel (ATF) pipelines connecting various greenfield and brownfield existing and upcoming airports in India, the Petroleum and Natural Gas Regulatory Board (PNGRB) had invited comments from the general public and various stakeholders, including oil marketing companies (OMCs), airport operators, and airline operators. According to Reliance, pipelines offer the most economical mode of liquid fuel transportation compared to costly road transport. In a notice inviting comments in February, the regulator acknowledged the substantial share of the ATF price in airline costs and stated that the provision of pipelines could potentially reduce the cost of air travel. Reliance further mentioned that this initiative would allow other oil marketing companies (OMCs) to utilise the pipelines for transporting their products, thereby fostering competitiveness within the industry.

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