Dilip Buildcon bags ₹1,800 crore EPC opportunity for Paradip-Raipur LPG pipeline

Infrastructure company Dilip BuildconLtd on Wednesday (September 9) said it has received a Letter of Intent (LOI) from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the development of an LPG pipeline from Paradip, Odisha, to Raipur, Chhattisgarh, with the proposed Engineering, Procurement and Construction (EPC) works representing a business opportunity of approximately ₹1,800 crore, excluding GST.

The project will be implemented through a Special Purpose Vehicle (SPV) in which Dilip Buildcon will hold 100% equity. The EPC works are proposed to be awarded to Dilip Buildcon and are to be executed over 36 months.

Under the Letter of Intent, PNGRB will grant an exclusive licence to the authorised entity for laying, building, operating or expanding the petroleum and petroleum product pipeline for transportation of liquefied petroleum gas (LPG).

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The project includes financing, construction and operation of the pipeline, with the operation period extending for 25 years after the three-year construction period.

Dilip Buildcon, through the SPV, will undertake the design, financing, development, construction, operation and maintenance of the proposed LPG pipeline infrastructure, subject to applicable approvals, authorisations and regulatory requirements.

The pipeline will facilitate the transportation of LPG to the bottling plants of various Oil Marketing Companies (OMCs). It is also proposed to operate as a Common Carrier, allowing eligible OMCs and users to access the pipeline capacity under the applicable PNGRB framework.

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The project will generate revenue through the applicable Petroleum and Petroleum Products Pipeline Transportation Tariff for LPG transportation.

Dilip Buildcon said it will not be engaged in the procurement, trading, distribution or sale of LPG, and will not bear the associated commercial risks relating to LPG procurement and marketing. Its role through the SPV will be to develop and operate the pipeline infrastructure and provide transportation services.

The contract has been awarded by PNGRB, a domestic entity. Dilip Buildcon said the promoter and promoter group companies have no interest in the entity awarding the contract, and the project does not fall under related-party transactions.

Shares of Dilip Buildcon Ltd ended at ₹391.55, down by ₹2.05, or 0.52%, on the BSE.

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