Bharat Petroleum Corporation Limited (BPCL) has approved the draft scheme for amalgamation of Petronet CCK Limited (PCCKL), a wholly owned subsidiary for integrated operations and better control. PCCKL is engaged in transport of petroleum products through a dedicated 292 Kilometer multi product pipeline constructed primarily for evacuation of petroleum products from Kochi refinery in Kerala.
The company said the following,
"We would like to inform you that the Board of Directors of BPCL at its meeting held on 12th September 2017, approved the draft Scheme for the amalgamation of Petronet CKK Limited, a wholly owned subsidiary of the Company with the Company (Scheme)."
The capacity utilization of the pipeline operated by PCCKL has been on a rise on the back of commissioning of additional units at Kochi refinery and has been given permission by downstream regulator Petroleum and Natural Gas Regulatory Board (PNGRB) to extend the pipeline from Coimbatore to Bangalore.
"In anticipation of the merger, BPCL has obtained approval from PNGRB for extending the same pipeline from Coimbatore to Bangalore. For integrated operations and control, it is essentially for the entire pipeline to be controlled by one entity. PNGRB has declared PCCKL’s pipeline as a dedicated pipeline and not as a common carrier."
The amalgamation will lead to improved efficiencies as PCCKL’s finance cost, as a standalone company, is comparatively higher. BPCLL operates a network of 2,241 Km of product pipelines with a designed capacity of 17.88 Million Tonnes (MMT). The pipelines achieved a throughput of 14 MT during 2016-2017, accounting for around 40 percent of total primary transportation.