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ONGC Videsh seals pipeline contract in Sudan

The overseas arm of India's state-owned oil and gas company Oil and Natural Gas Corp (ONGC), ONGC Videsh Ltd (OVL), has secured a contract to build a 714 km pipeline in Sudan. The company will head a consortium that will construct the US$250 million pipeline from Khartoum Refinery to Port Sudan.

ONGC Videsh seals pipeline contract in Sudan

Atul Chandra, the managing director of OVL, confirmed that the pipeline was the first "service provider contract the company has bagged in Sudan [and] we plan to undertake the project as a consortium with ONGC and OVL as lead partners with 50 percent equity." The other partners are expected to be Engineers India Ltd (20%), Indian Oil Corp (15%) and Oil India Ltd (15%).

The pipeline is due for completion in 2005. India is expected to receive oil and cash returns in 2006. On top of the pipeline project, the Indian government has also pledged an investment of US$750 million for the renovation and modernisation of the Khartoum Refinery, Sudan's state-owned oil refinery.

India hopes to achieve a target of one million tonnes of oil per annum for its investments in Sudan. The Sudanese crude, however, will not be transported to India despite the country being dependent upon foreign imports for up to 70% of its crude oil requirements. The Sudan crude is being seen purely as a secure source.

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