Dilip Buildcon has received approval from the Petroleum and Natural Gas Regulatory Board (PNGRB) for the development of the Paradip-Raipur LPG pipeline, a project involving an estimated investment of around Rs 1,800 crore.
The project will be executed through a wholly owned special purpose vehicle (SPV), with the pipeline scheduled to be completed within 36 months. Dilip Buildcon is proposed to receive the engineering, procurement and construction (EPC) contract for the project. Following completion of the three-year construction period, the company will have an exclusive 25-year authorisation to operate the pipeline.
DBL To Design, Finance And Operate Pipeline
Under the agreement, Dilip Buildcon will be responsible for designing, financing, constructing, operating and maintaining the pipeline corridor. The company will recover its investment through PNGRB-regulated petroleum pipeline transportation tariffs levied up to designated delivery points.
The dedicated pipeline is expected to reduce dependence on conventional road tankers for LPG transportation, potentially improving logistics efficiency and highway safety along the route. The pipeline will operate under a common-carrier framework, allowing eligible oil marketing companies and industrial users to access its transportation capacity.
Company To Remain Insulated From LPG Price Risk
Dilip Buildcon's role through the SPV will be limited to infrastructure development and transmission services. The company will not procure, trade, distribute or sell LPG.
The structure therefore keeps the company outside commodity procurement and commercial marketing risks associated with LPG while providing exposure to the long-term pipeline infrastructure business. The project gives Dilip Buildcon both the proposed Rs 1,800 crore EPC opportunity during the construction phase and a long-duration operating role through the 25-year authorisation.