IOCL - Final Report by JYOTI &amp ARSHE From Alliance University

Summer Internship Project Report On
SUPPLY CHAIN MANAGEMENT IN LPG

In partial fulfillment of the Course-Industry Internship Programme (IIP) in Semester II of the Master of Business Administration (July 2011-13)
Under the kind guidance of
Industry Guide
College Guide
Mr. Ashutosh Gupta, Sr. Manager, Dr. Satish kumar Mrs. Kavita Tickoo, Dy. Manager, Indian Oil Corporation Ltd. Submitted by JYOTIRAMAN DEY & ARSHE NOOR Date: 20TH JUNE 2012
1 JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS
Student Declaration
We, JYOTIRAMAN DEY & ARSHE NOOR to the best of our knowledge & belief, hereby declare that the project report entitled: SUPPLY CHAIN MANAGEMENT IN LPG in Indian Oil Corporation Ltd. Is the result of our own work in the fulfillment of academic requirement. The training is done in Indian Oil Corporation Limited (IOCL) [Western Region, Marketing HO, Mumbai, Maharashtra State Office] for a period of two and half months commencing from 09.04.2012 to 15.06.2012. This project work is submitted to Alliance University-School of business, Bengaluru. As well as in Indian Oil Corporation Limited [Western Region, Marketing HO, Mumbai, Maharashtra State Office].
JYOTIRAMAN DEY (REGD NO. 11010121427), ARSHE NOOR (REGD NO. 11010121358) MBA- MARKETING SPECIALIZATION
Alliance University-School of business, Bengaluru

Master of Business Administration
Certificate
This is to certify that Mr. Jyotiraman Dey and Ms. Arshe Noor bearing Regn. No. 11010121427 & 11010121358 respectively has completed the report titled SUPPLY CHAIN MANAGEMENT IN LPG under my guidance for the partial fulfillment of the Course: Industry Internship Programme (IIP) in Semester II of the Master of Business Administration (July 2011 2013).
(Signature of Faculty Guide) Dr. Satish Kumar
JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS
ABSTRACT
Indian Oil Corporation Limited, with a yearly turnover of about 3 Lac Crores is the biggest Company in India in terms of sales. It has once again topped the Indian Companies in the Fortune 500 list of Companies with a rank of 98. In such a large sized corporation the common problem is the supply chain management. In this fluctuating Gas Market it is very difficult to maintain the price of LPG cylinder and hence the Profits. Moreover the Private Companies are entering the Oil & Gas Industry which has provided a tough competition for IOCL. In this study all over India (every region) are analyzed and provided a suitable pipeline grid for LPG for the smooth transportation of it. All the Regions have been analyzed in details and a few probable solutions to the existing problems has been formulated i.e. pipeline grid.
Acknowledgement
Its a privilege to be associated with Indian Oil Corporation Limited, a fortune Global 500Company, Indias top brand also worlds 18th best largest company. This acknowledgement is not only the means of formality, but to me, it is a way by which I am getting the opportunity to show the deep sense of gratitude and obligation to all the people who have provided me with inspiration, guidance and help during the preparation of the project. At the very outset, I would like to express my gratitude from bottom of my heart to Mr. P.K. JHA [Chief Manager, LPG OPERATION] for giving me the opportunity to do my Summer Internship Project in this esteemed organization. I articulate my sincere gratitude to my project guide Mr. Ashutosh Gupta, Sr. Manager (LPG-OPS) & Ms. Kavita Tickoo, Dy. Manager(LPG-OPS) , Marketing HO, Mumbai, Indian Oil Corporation Ltd. who have spend their valuable time and guided me throughout the training process in spite their busy schedule, in shaping of my project. I am also thankful to Ms. S. MATHIAS, Manager (T & D), and Mr. RAJOO, Marketing HO, IOCL for guiding me throughout the project providing me with the required information about Indian Oil. I would also like to express my indebtedness to my faculty guide Dr. SATISH KUMAR, Faculty Alliance University-School Of Business who helped me in preceding my project work, which ultimately resulted in successful completion of the project. But last not the least I am thankful to my parents, friends and all well wishers for blessing me for my success.
JYOTIRAMAN DEY (REGD NO. 11010121427) ARSHE NOOR (REGD NO. 11010121358) MBA- MARKETING SPECIALIZATION Alliance University-School of business, Bengaluru
TABLE OF CONTENTS Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. PARTICULARS Oil Industry Overview Oil Industry Structure Company Profile Location Vision, Mission & Values Products Profile SWOT of the Company Organizational Structure Pipelines Introduction to Fossil Fuel LPG IOCs LPG Market Structure Supply Chain Management Objectives Sources Methodology Secondary Data Observations & Analysis Findings Pipeline Details Recommendations Conclusion Annexure References Page No. 9 10 12 15 20 24 25 27 30 35 36 42 49 52 54 64 71 76 83 85 87 88 90 91
LIST OF TABLES Table No. 1. 2. 3. 4. 5. 6. PARTICULARS Retail Market Share Actual Demand Forecasted Demand Secondary Data Calculation of Pipeline Pipeline Details Page No. 11 44 46 71-75 81 85
LIST OF FIGURES Fig. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. PARTICULARS Page No. 10 11 13 27 30 41 42 43 43 45 47 50 54 67 70 78 78 84
Structure of Oil Industry in India Market share of different companies in India Formation of IOCL Organizational Structure of IOCL Pipeline network of IOCL in India Sales IOCs LPG market statistics Market share of IOCL Sector wise LPG consumption in India Actual trend graph Forecasted trend graph Supply chain of LPG Industry refineries Bottling plants of IOC Import & refineries Production of LPG Sales of LPG Proposed LPG pipelines in India map
OIL INDUSTRY OVERVIEW Background

After the Indian Independence, the Oil Industry in India was a very small one in size and Oil was produced mainly from Assam and the total amount of Oil production was not more than 250,000 tones per year.
This small amount of production made the oil experts from different countries predict the future of the oil industry as a dull one and also doubted India's ability to search for new oil reserves. But the Government of India declared the Oil industry in India as the core sector industry under the Industrial Policy Resolution bill in the year 1954, which helped the Oil Industry in India vastly.
Oil exploration and production in India is done by companies like NOC or National Oil Corporation, ONGC or Oil and Natural Gas Corporation and OIL who are actually the oil companies in India that are owned by the government under the Industrial Policy Rule. The National Oil Corporation during the 1970s used to produce and supply more than 70 percent of the domestic need for the petroleum but by the end of this amount dropped to near about 35 percent. This was because the demand on the one hand was increasing at a good rate and the production was declining in a steady rate. Oil Industry in India during the year 2004-2005 fulfilled most of demand through importing oil from multiple oil producing countries. The Oil Industry in India itself produced nearly 35 million metric tons of Oil from the year 2001 to 2005. The Import that is done by the Oil Industry in India comes mostly from the Middle East Asia.
The Oil that is produced by the Oil Industry in India provides more than 35 percent of the energy that is primarily consumed by the people of India. This amount is expected to grow further with both economic and overall growth in terms of production as well as percentage. The demand for oil is predicted to go higher and higher with every passing decade and is expected to reach an amount of nearly 250 million metric ton by the year 2024.
OIL INDUSTRY STRUCTURE
Fig.1: Structure of Oil Industry in India

Oil Industry Dynamics in India

At present, there are four PSUs namely, IOC, HPC, BPC and IBP (subsidiary of IOC) marketing oil products in the country. In addition, certain private players like Reliance, Essar and Shell have also in marketing rights for transportation fuels. Their marketing presence today, however, is not significant and is limited to about 1370 outlets out of total retail outlet strength of about 29,380 . Some additional players like ONGC, who have also been granted marketing rights for transportation fuels, are in the process of setting up retail outlets to integrate across the entire hydrocarbon value chain. The company wise market share in sales is tabled below: It is evident that the share of the private sector in meeting total consumption of refined petroleum products presently stands at around 15%. This proportion is however, expected to grow significantly in the coming years.
11
COMPANY PROFILE
INTRODUCTION
In order to ensure greater efficiency and smooth working in the petroleum sector, Government of India decided to merge the refineries and the distribution activities. The Indian Refineries and Indian Oil Company were combined to form the giant Indian Oil Corporation (IOCL) on 1st September 1964, with its registered office at Bombay. In 1967, the pipeline division of the corporation was merged with the refineries division. Research & Development of Indian Oil Came into Existence in 1972. In October 1981 Assam Oil Company was nationalized and has been amalgamated with IOCL as Assam Oil Division (AOD).
12
Fig. 3: Formation of Indian Oil Corporation Ltd. Beginning in 1959 as Indian Oil Company Ltd., Indian Oil Corporation Ltd. was formed in 1964 with the merger of Indian Refineries
Ltd.(established1958). Indian Oil and its subsidiaries account for 49% petroleum products market share, 40.4% refining capacity and 69% downstream sector pipelines capacity in India.
13
As the flagship national oil company in the downstream sector, Indian Oil reaches precious petroleum products to millions of people every day through a countrywide network of about 34,000 sales points. They are backed for supplies by 166 bulk storage terminals and depots, 101 aviation fuel stations and 89 Indane (LPG) bottling plants. About 7,100 bulk consumer pumps are also in operation for the In operation for the convenience of large consumers, ensuring products and inventory at their doorstep. Indian Oil operates the largest and the widest network of petrol & diesel stations in the country, numbering over 17,600. It reaches Indane cooking gas to the doorsteps of over 50 million households in nearly 2,700 markets through a network of about 5,000 Indane distributors.
Indian Oils ISO-9002 certified Aviation Service commands over 62% market share in aviation fuel business, meeting the fuel needs of domestic and international flag carriers, private airlines and the Indian Defense Services. The Corporation also enjoys a dominant share of the bulk consumer business, including that of railways, state transport undertakings, and industrial, agricultural and marine sectors.
14
LOCATION
Registered Office: Indian Oil Bhavan, G-9, Ali Yavar Jung Marg, Bandra(East), Mumbai-400 051 Corporate Office: 3079/3, Sadiqnagar, J B Tito Marg, New Delhi- 110 049
Refineries Division: Head Office : SCOPE Complex, Core-2 7, Institutional Area, Lodhi Road, New Delhi -110003 Barauni Refinery: P.O. Barauni Oil Refinery, Dist. Begusarai -861 114 (Bihar) Gujarat Refinery: P.O. Jawahar Nagar, Dist. Vadodara -391 320(Gujarat)
15
Guwahati Refinery: P.O. Noonmati, Guwahati-781020 (Assam) Haldia Refinery: P.O. Haldia Refinery Dist. Midnapur-721 606 (West Bengal) Mathura Refinery: P.O. Mathura Refinery, Mathura -281 005(Uttar Pradesh)
Panipat Refinery: P.O. Panipat Refinery, Panipat-132140(Haryana)
Bongaigaon Refinery: P.O. Dhaligaon Dist. Chirang, Assam - 783 385
Marketing Division Head Office: G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai -400 051 Northern Region: IndianOil Bhavan, 1, Aurobindo Marg, Yusuf Sarai New Delhi -110016 Eastern Region: IndianOil Bhavan, 2, Gariahat Road, South (Dhakuria) Kolkata -700 068 Western Region: 254-C, Dr. Annie Besant Road, Worli Colony, Mumbai -400 025
16
Southern Region: IndianOil Bhavan, 139, Nungambakkam High Road
R&D Centre R&D Centre: Sector 13 Faridabad -121 007(Haryana)
Pipelines Division Head Office: A-1 Udyog Marg, Sector-1, Noida-201301 Northern Region: P.O. Panipat Refinery Panipat -132 140 (Haryana) Western Region: P.O. Box1007,Bedipara, Morvi Road,Gauridad, Rajkot-360 003 Southern Region: 139, Nungambakkam High Road, Chennai 600034 Assam Oil Division Assam Oil Division: P.O. Digboi -768 171(Assam)
IBP Division IBP Division: 34-A, Nirmal Chandra Street, Kolkata - 700 013 Business Group(Cryogenics): Sewri Terminal II, Sewri (East), Mumbai - 400 015 Business Group(Cryogenics): A-4, MIDC, Ambad, Nashik - 422 010
Group Companies Chennai Petroleum Corporation Ltd.: 536, Anna Salai, Teynampet, Chennai - 600 018 Indian Oil Technologies Ltd: SCOPE Complex, Core-2 7, Institutional Area, Lodhi Road, New Delhi-110003 Indian Oil (Mauritius) Ltd.: Mer Rouge Port Louis Maruritius IOC Middle East FZE: LOB 14209, Jebel Ali Free Zone, P.O.Box: 261338 Lanka IOC PLC: Lanka IOC Head Office Level 20, West Tower, World Trade Center, Echelon Square, Colombo - 01, Sri lanka
18
SALIENT FEATURES
Indias Most Trusted Fuel Pump Brand (ET. Brand Equity-AC Nielson Survey 2007) Indias largest commercial enterprise with leading market shares in downstream segment of oil business. Highest ranked Indian corporate in Fortunes list of worlds 500 largest Companies (2008:: 116th ) 20 th largest petroleum company in the world- Fortune Global500 Local Currency Rating of A1+(short-term) & LAA+(long-term) from ICRA Indias No.1 corporate in annual listing of Business Standards (BS 10000),Business India(BI Superior 100) &Economic Time (ET 500).
19
VISION, MISSION AND VALUES

Vision: A major diversified, trans-national, integrated energy company, with national leadership and a strong environment conscience, playing a national role in oil security & public distribution.
20
Mission: To achieve international standards of excellence in all aspects of energy and diversified business with focus on customer delight through value of products and services, and cost reduction. To maximize creation of wealth, value and satisfaction for the stakeholders. To attain leadership in developing, adopting and assimilating state-of-the-art technology for competitive advantage. To provide technology and services through sustained Research and Development. To foster a culture of participation and innovation for employee growth and contribution. To cultivate high standards of business ethics and Total Quality Management for a strong corporate identity and brand equity. To help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience. VALUE:
21
OBJECTIVES & OBLIGATIONS OF IOCL

Objectives: To serve the national interests in oil and related sectors in accordance and consistent with Government policies. To ensure maintenance of continuous and smooth supplies of petroleum products by way of crude oil refining, transportation marketing activities and to provide appropriate assistance to consumers to conserve and use petroleum products efficiently. To enhance the country's self-sufficiency in crude oil refining and build expertise in laying of crude oil and petroleum product pipelines. To further enhance marketing infrastructure and reseller network for providing assured service to customers throughout the country. To create a strong research & development base in refinery processes, product formulations, pipeline transportation and alternative fuels with view to
minimizing/eliminating imports and to have next generation products. To optimize utilization of refining capacity and maximize distillate yield and gross refining margin. To maximize utilization of the existing facilities for improving efficiency and increasing productivity. To minimize fuel consumption and hydrocarbon loss in refineries and stock loss in marketing operations to effect energy conservation. To earn a reasonable rate of return on investment. To avail of all viable opportunities, both national and global, arising out of the Government of Indias policy of liberalization and reforms.
22
To achieve higher growth through mergers, acquisitions, integration and diversification by harnessing new business opportunities in oil exploration production, petrochemicals, natural gas and downstream opportunities overseas. To inculcate strong core values among the employees and continuously update skill sets for full exploitation of the new business opportunities. To develop operational synergies with subsidiaries and joint ventures and continuously engaged across the hydrocarbon value chain for the benefit of society at large.
Obligations:
Towards customers and dealers: - To provide prompt, courteous and efficient service and quality products at competitive prices. Towards suppliers: - To ensure prompt dealings with integrity, impartiality and courtesy and help promote ancillary industries. Towards employees: - To develop their capabilities and facilitate their advancement through appropriate training and career planning. To have fair dealings with recognized representatives of employees in pursuance of healthy industrial relations practices and sound personnel policies. Towards community: - To develop techno-economically viable and environmentfriendly products. To maintain the highest standards in respect of safety, environment protection and occupational health at all production units. Towards Defense Services: - To maintain adequate supplies to Defense and other Paramilitary services during normal as well as emergency situations.
23
PRODUCTS PROFILE (IOCL)

The Products produced by IOCL are broadly classified into the following cases: Class A: 1. Liquid Petroleum Gas (L.P.G) Class B: 2. Motor Spirit (M.S.)/Gasoline 3. Super Kerosene Oil (S.K.O) 4. High Speed Diesel Oil (H.S.D) Class C: 5. High Speed Diesel Oil (H.S.D) 6. Furnace Oil (F.O.) 7. Bitumen 8. Naphtha 9. Aviation Turbine Fuel (A.T.F) Class D: 10. Mineral Turpentine Oil (M.T.O) 11. Jute Batching Oil (J.B.O) 12. Light Diesel Oil (L.D.O) 13. Unleaded petroleum 14. Lubes & Greases 15. Fuel & Feedstock 16. Super Kerosene Oil
24
STRENGTH
SWOT OF THE COMPANY

R&D
WEAKNESS
Controls 10 refineries Acquired equity stakes in CPCL & BRPL, & in 2001, became subsidiaries of IOC.
Major weakness for the company is the
Petrochemical product development technology
58% of IOCs refining capacity is located in the Northern and Western regions
Technological drawback, as compared to some major foreign player
Very strong distribution network Acquired management control of the marketing company IBP Extensive joint venture agreements Already entered overseas markets such as Sri Lanka, Maldives, and Oman.
OPPERTUNITY Easily go for extension at any point of time, and can introduce any new products. Make the buying process more easy for the customers. Think over the issue to build its own pipelines Great scope in E&P
THREAT Foreign players with more advanced technology. Crude oil supply - cannot fix its price , In future the market will welcome more private players If the Govt. Policies allow the private players to set their own price, the pvt. Player can seriously harm IOCL share.
25
MARKETS
Indian Oil has one of the largest petroleum marketing and distribution networks in Asia, with over 34,000 marketing touch points. Its ubiquitous petrol/diesel stations are located across different terrains and regions of the Indian subcontinent. From the icy heights of the Himalayas to the sun-soaked shores of Kerala, from Kutch on India's western tip to Kohima in the verdant North East, Indian Oil is truly 'in every heart, in every part'. Indian Oil's vast marketing infrastructure of petrol/diesel stations, Indane (LPG) distributorships, SERVO lubricants & greases outlets and large volume consumer pumps are backed by bulk storage terminals and installations, inland depots, aviation fuel stations, LPG bottling plants and lube blending plants amongst others. The countrywide marketing operations are coordinated by 16 State Offices and over 100 decentralized administrative offices. Several landmark surveys continue to rate Indian Oil as the dominant energy brand in the country and an enduring symbol for high quality petroleum products and services. The heritage and iconic association that the brand invokes has been built over four decades of commitment to uninterrupted supply line of petroleum products to every part of the country, and unique products that cater not only to the functional requirements but also the aspiration needs of millions of customers. Indian Oil has been adjudged India's No. 1 brand by UK-based Brand Finance, an independent consultancy that deals with valuation of brands. It was also listed as India's 'Most Trusted Brand' in the 'Gasoline' category in a Readers' Digest - AC Nielsen survey. In addition, Indian Oil topped The Hindu Business lines "India's Most Valuable Brands" list.
26
ORGANIZATION STRUCTURE OF IOCL:
Fig. 4: Organizational Structure of IOCL
27
BUSINESS OF IOCL
REFINING: Born from the vision of achieving self-reliance in oil refining and marketing for the nation, Indian Oil has gathered a luminous legacy of more than 100 years of accumulated experiences in all areas of petroleum refining by taking into its fold, the Digboi Refinery commissioned in 1901. Indian Oil controls 10 of Indias 20 refineries. The group refining capacity is 60.2 million metric tonnes per annum (MMTPA) or 1.2 million barrels per day -the largest share among refining companies in India. It accounts for 33.8% share of national refining capacity. The strength of Indian Oil springs from its experience of operating the largest number of refineries in India and adapting to a variety of refining processes along the way. The basket of technologies, which are in operation in Indian Oil refineries include: Atmospheric/Vacuum Distillation; Distillate FCC/Reside FCC; Hydro cracking; Catalytic Reforming, Hydrogen Generation; Delayed Coking; Lube Processing Units; Visbreaking; Merox Treatment; HydroDesulphurization of Kerosene & Gasoil streams; Sulphur recovery; Dewaxing, Wax Hydro finishing; Coke Calcining, etc. The Corporation has commissioned several grassroots refineries and modern process units. Procedures for commissioning and start-up of individual units and the refinery have been well laid out and enshrined in various customized operating manuals, which are continually updated. Indian Oil refineries have an ambitious growth plan with an outlay of about Rs. 55,000 crore for capacity augmentation, de-bottlenecking, bottom up gradation and quality up gradation. Major projects under implementation include a 15 MMTPA grassroots refinery at
28
Paradip, Orissa, Naphtha Cracker and Polymer Complex at Panipat, Panipat Refinery expansion from 12 MMTPA to 15 MMTPA, among others. In addition, petrol quality up gradation projects are under implementation at Panipat, Mathura, Barauni, Guwahati and Digboi refineries proposed to be completed by the end of 2009. On the environment front, all Indian Oil refineries fully comply with the statutory requirements. Several Clean Development Mechanism projects have also been initiated. To address concerns on safety at the work place, a number of steps were taken during the year, resulting in reduction of the frequency of accidents. Innovative strategies and knowledge-sharing are the tools available for converting challenges into opportunities for sustained organizational growth. With strategies and plans for several value-added projects in place, Indian Oil refineries will continue to play a leading role in the downstream hydrocarbon sector for meeting the rising energy needs of our country.
29
PIPELINES:
Indian Oil Corporation Ltd. operates a network of 10329 km long crude oil and petroleum product pipelines with a capacity of 71.60 million metric tonnes per annum. Cross-country pipelines are globally recognized as the safest, cost-effective, energy-efficient and environmentfriendly mode for transportation of crude oil and petroleum products.
30
During the year 2008-09 Indian Oils crude oil pipelines registered the throughput of 38.46 million metric tonnes. Corporations largest crude oil handling facility at Vadinar marked the berthing of 4000th tanker since inception. The terminal operates two offshore Single Point Mooring (SPM) systems, to feed Koyali, Mathura and Panipat refineries. Raising efficiency and emerging as the least-cost supplier, Indian Oil has added the 330-km Paradip-Haldia crude oil pipeline (PHCPL) to its bustling pipeline network during the year. The PHCPL system has a Single Point Mooring installed 20-km off the Paradip coast. With this, it is now able to pump crude oil from Very Large Crude Carriers to the tank-farm set up onshore and onward to Haldia through the pipeline. The Pipeline has replaced the earlier system of receipt of crude oil at Haldia port through smaller tankers. On the west coast, the Mundra-Panipat pipeline is being further augmented to transport an additional 3 Million Metric Tonne Per Annum (MMTPA) of crude oil to Panipat Refinery, under expansion from 12 to 15 MMTPA. Additional requirement of crude oil for Koyali, Mathura and Panipat refineries is planned to be met by de-bottlenecking and augmenting Salaya-Mathura Pipeline system. Indian Oils product pipelines, connecting its refineries directly to high-consumption centers, achieved a throughput of 20.92 million tonnes during 2008-09. Indian Oil has now joined the select group of companies in India which owns and operates LPG pipelines by building its first such cross-country facility linking Panipat with Jalandhar. Apart from providing better logistics, this pipeline can transport 700,000 tonnes of LPG from Kohand near Panipat refinery to Indian Oils bottling plants at Jalandhar and Nabha in Punjab. The pipeline will also simultaneously to meet the requirement of LPG at Una and Baddi in Himachal Pradesh and at Jammu and Leh in J&K.
31
Two pipelines linking the major airports of India have been commissioned during the year to transport Aviation Turbine Fuel to these airports. The 36 km long pipeline from existing Devangonthi terminal to New Bengaluru International Airport, Devanhalli, Bengaluru was commissioned in October 2008. The 95 km long ATF pipeline from CPCL to Chennai AFS was commissioned in December 2008. In its continuous efforts of expanding the network Indian Oil is implementing 290 km long product pipeline from Chennai to Bengaluru to facilitate cost effective positioning of products at consumption centre located in and around Bengaluru and to strengthen product positioning capabilities of CPCL Refinery. Indian Oil is also implementing a 217 km Long Branch pipeline from Koyali-Sanganer Pipeline at Viramgam to existing scrapper station at Churwa along with use of a 14 km long existing pipeline from Churwa to Kandla. One of the major product pipelines currently under execution is 290 km long ChennaiBengaluru Pipeline. A 21-km spur line from Mathura to Bharatpur and a 94-km branch line to Hazira on the Koyali-Dahej pipeline are also under implementation. A grassroots terminal facility is being set up at Ratlam to feed the local markets. A 118-km pipeline is being laid from Bijwasan to Panipat for transporting Naphtha from Mathura Refinery to the upcoming Naphtha Cracker unit at Panipat. Indian Oil sees gas pipelines as a major growth area in the future. The gas market in India is expanding fast, thanks to enhanced availability of the product from indigenous sources and through imports. The Corporation will commission its first regassified LNG pipeline from Dadri to Panipat (132 km) to synchronize with the completion of the first phase of the power plant coming up under the Naphtha Cracker project at Panipat.
32
Indian Oil has translated the expertise of its personnel in pipeline operations into a business opportunity, by offering training and consultancy to several Indian and overseas companies. Currently, the Corporation is imparting training for personnel of the Greater Nile Petroleum Company, Sudan. Reaching out to a Billion Hearts: Indian Oil has one of the largest petroleum marketing and distribution networks in Asia, with over 35,000 marketing touch points. Its ubiquitous petrol/diesel stations are located across different terrains and regions of the Indian sub-continent. From the icy heights of the Himalayas to the sun-soaked shores of Kerala, from Kutch on India's western tip to Kohima in the verdant North East, Indian Oil is truly 'in every heart, in every part'. Indian Oil's vast marketing infrastructure of petrol/diesel stations, Indane (LPG) distributorships, SERVO lubricants & greases outlets and large volume consumer pumps are backed by bulk storage terminals and installations, inland depots, aviation fuel stations, LPG bottling plants and lube blending plants amongst others. The countrywide marketing operations are coordinated by 16 State Offices and over 100 decentralized administrative offices. Several l and mark surveys continue to rate Indian Oil as the dominant energy brand in the country and an enduring symbol for high quality petroleum products and services. The heritage and iconic association that the brand invokes has been built over four decades of commitment to uninterrupted supply line of petroleum products to every part of the country, and unique products that cater not only to the functional requirements but also the aspiration needs of millions of customers. Indian Oil has been adjudged India's No. 1 brand by UK-based Brand Finance, an independent consultancy that deals with valuation of brands. It was also listed as India's 'Most Trusted Brand' in the 'Gasoline' category in a Readers' Digest - AC Nielsen survey. In addition, Indian Oil
Topped The Hindu Business line's "India's Most Valuable Brands" list. However, the value of the Indian Oil brand is not just limited to its commercial role as an energy provider but straddles the entire value chain of gamut of exploration & production, refining, transportation & marketing, petrochemicals & natural gas and downstream marketing operations abroad. Indian Oil is a national brand owned by over a billion Indians and that is a priceless value.
34
INTRODUCTION TO FOSSIL FUELS

When the remnants of trees and animals get buried in the earths crust they are subjected to high pressure and temperature for a prolonged period of time and get converted to a fuel which is rich in carbon and hydrogen content. This is called as fossil fuel. Fossil fuels are naturally found in the earths crust and are not unlimited. Crude oil, the most common fossil fuel, is processed to remove impurities to produce fuels of different carbon content. As the carbon and hydrogen contents vary in the fuel the calorific value, i.e. the energy the fuel produces, of the fuel varies. A COMPARISION OF CALORIFIC VALUE OF FOSSIL FUELS:
120 100 80 60 40 20 0
35
LIQUEFIED PETROLEUM GAS (LPG)

Liquefied petroleum gas is one of the most common and an alternative fuels used in the world today. Liquefied petroleum gas is also called as LPG, LP Gas, or Auto gas. The gas is a mixture of hydrocarbon gases used as a fuel for various purposes. This is mainly used in heating appliances and vehicles and is replacing chlorofluorocarbons as an aerosol propellant. It is also used as a refrigerant mainly to reduce damage to the ozone layer. The main reason behind this being the soaring in the prices of the oil, LPG has emerged as much preferred choice. LPG is a fossil fuel and can be refined from oil and natural gas. LPG is basically a hydrocarbon with propane and butane as main constituent. LPG is a byproduct of natural gas processing. It is the product that comes from crude oil refining when carried with the smaller amounts of propylene and butylenes. LPG is largely propane and thus the characteristics of propane are sometimes taken as a close approximation to those of LPG. LPG or Liquefied Petroleum Gas has become the most preferred fuel when it comes to domestic and certain industrial uses.
LPG is used for: Cooking Domestic and Industrial Heating Automotive Fuel Propellant for aerosols Feedstock for production of petrochemicals
36
Properties of LPG: Flammable Volatile Vaporizes readily Liquid forms lots of vapor one volume forms 250 volumes of vapor Liquid expands with temperature Vapor heavier than air : 1.5-2 times Colorless and odorless (unless odorized) Not much heat needed to vaporize No lubricating qualities Liquid is light weight: half as that of water Can cause asphyxiation
There are many advantages which can be associated with LPG:

1) The most important advantage of using LPG is its effect on the environment. It is certainly a more environment friendly way and this is also another reason why many Asian Countries are also switching to LPG run cars and other vehicles. 2) LPG offers clean burning and this is also another reason why it is not very detrimental to the atmosphere in comparison to other fuels. 3) LPG equipments and burners do not demand a high maintenance because the burners have a longer life due to no soot deposits. 4) LPG is also considered highly efficient in comparison to many other fuels. It is good to be used in direct firing system. 5) LPG provides instant heat and is ideal when you require faster warm up or cooling down in any process. 6) With usage of LPG, corrosion effects are also reduced to a great extent.
37
7) Using LPG also avoids the parts of the equipments to get decarburized. At the same time, it also avoids scaling to a large extent. 8) The flame temperature resultant from LPG is instantly controllable and this is what is required when it comes to domestic uses of LPG. 9) LPG is indeed a greener and cleaner fuel since it has a low carbon content. Like LPG, CNG is also a clean gaseous fuel which gives a tough competition to LPG. So we compare the properties of both to find out the better of the two.
A COMPARISION BETWEEN CNG AND LPG:
CNG Requires higher initial investment Lower running costs Lesser calorific value Bulkier and heavier storage tanks Limited availability Safer: It is lighter and has a higher ignition temperature More popular with commercial vehicles.
LPG Lower initial investment Higher running costs Higher calorific value Smaller and lighter storage tanks Far better availability Heavier and has a lower ignition temperature More popular with private vehicles.
38
WHY LPG IS BETTER:
LPG MARKETING IN INDIAN HISTORY: o o o o LPG marketing started in India in the mid-fifties by the multinational oil companies (Burmah Shell / Stanvac) The bottling operations were then mainly confined to Refinery plants and marketing was limited to nearby areas Though IOC started functioning in the month May 1959, it actually started marketing of LPG in the year 1965 with brand name `INDANE. Demand started picking up from 1980s with 1. its acceptability as clean and safe product 2. additional availability from refineries and gas fractionators Till 1993, only government oil companies were permitted to market LPG
39
The LPG (supply and distribution) Order was revised in 1993 to allow Private entrepreneurs to import, bottle, distribute and market LPG within the country under PMS.
In the earlier eighties, the total number of customers in the country was about 30 Lakhs. After 3 decades, there is a multifold increase in number of customers/sales.
LPG sales on account of IOC stood at 6600 TMT during 2010-11 as against Industry sale of 13911 TMT.
LPG waiting list stands fully liquidated.
GRADES MARKETED/TYPES OF SALES: 1. Domestic LPGo Packed product in 14.2kg, & 5kg cylinders, home delivered through distributors.
2. Non domestic LPGo Packed product 19kg and 47.5 kg delivered supply through distributors. Exclusive distributorships in offing. 3. Bulk LPGo Delivered to storage tanks of customers o Business associates to garner customers.
4. Auto LPGo Through retail outlets and stand alone outlets at distributor premises.
40
INTERNATIONAL DEMAND OF LPG:

LPG production in the US has been growing due to the exploitation of growing shale Gas & Oil prices, but global LPG markets have been tighter than expected. This has created an unusual dynamic in which LPG prices in the US have been significantly lower than international prices & arbitrage has resulted in record exports of propane from the US gulf coast.
FACTORS RESPONSIBLE FOR LPG MARKET OUTSIDE THE US TIGHT IN 2010: o Reduction in LPG production in Algeria resulted in a drop in LPG exports by sonatrach. o LPG terminal maintenance in the North Sea disrupted trade in northern west. o Global demand of LPG totaled slightly less than 220 million tons in 2005.Puroin & Gets estimates that the market will grow to about 228 millions tones in 2006 & reach more than 258 million by the year 2010.
41
IOCS LPG MARKET STATISTICS

IOC MARKET SHARE IN LPG Presently, there are three Oil Marketing Companies (OMC) in India Indian Oil CorporationLimited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited. IOCL has been enjoying the major market share of the three since 200405.
42
SECTOR-WISE LPG CONSUMPTION IN INDIA (2010-11)
43
DEMAND FORECAST OF LPG:
Every plan starts with a demand forecast. So with the past eight years data of actual LPG demand of the country we have forecasted the future demand of LPG. It is only a quantitative demand forecast. The actual demand values for the past 7 years are as follows:
44
By visual inspection we can see that the demand has been increasing every year. So this made us choose the trend analysis method for forecasting demand.
45
The forecasted demand for the next 12 years is as under:
46
Other data: The trend equation: Y = 8729560 + 678453.3 X Where X = time and Y = demand Mean Absolute Deviation (MAD) = 257947.9 The demand figures we have drawn are not accurate even. We tried to reduce the error by avoiding rounding off. The values for the first couple of years may get closer to the actual demand but as the forecasted values go further into the future the more unreliable the value gets. It is because there may be many unforeseen or unanticipated events that may increase or decrease the demand.
47
FUTURE DEMAND OF LPG: What do we see over the next 30 years? The answer to that question varies by region, reflecting diverse economic and demographic trends as well as the evolution of technology and government policies. Everywhere, though, we see energy being used more efficiently and Energy supplies continuing to diversify as new technologies and sources emerge. Other key findings of this years Outlook include: Global energy demand will be about 30 percent higher in 2040 compared to 2010, as economic output more than doubles and prosperity expands across a world whose population will grow to nearly 9 billion people. Energy demand growth will slow as economies mature, efficiency gains accelerate and population growth moderates. In the countries belonging to the Organization for Economic Cooperation and Development (OECD) including countries in North America and Europe we see energy use remaining essentially flat, even as these countries achieve economic growth and even higher living standards. In contrast, Non OECD energy demand will grow by close to 60 percent. Chinas surge in energy demand will extend over the next two decades then gradually flatten as its economy and population mature. Elsewhere, billions of people will be working to advance their living standard requiring more energy. The need for energy to make electricity will remain the single biggest driver of demand. By 2040, electricity generation will account for more than 40 percent of global energy consumption. Demand for coal will peak and begin a gradual decline, in part because of emerging policies that will seek to curb emissions by imposing a cost on higher-carbon fuels. Use of renewable energies and nuclear power will grow significantly. Oil, gas and coal continue to be the most widely used fuels, and have the scale needed to meet global demand, making up about 80 percent of total energy consumption in 2040.Natural gas will grow fast enough to overtake coal for the number-two position behind oil. Demand for natural gas will rise by more than 60 percent through 2040. For both oil and natural gas, an increasing share of global supply will come from unconventional sources such as those produced from shale formations. Gains in efficiency through energy-saving practices and technologies such as hybrid vehicles and new, high efficiency natural gas power plants will temper demand growth and curb emissions. 48 JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS
SUPPLY CHAIN MANAGEMENT

INTRODUCTION: Within the organization, the supply chain refers to a wide range of functional areas. These Include Supply Chain Management-related activities such as inbound and outbound transportation warehousing, and inventory control. Sourcing, procurement, and supply management fall under the supply-chain umbrella, too. Forecasting, production planning and scheduling, order processing, and customer service all are part of the process as well. Importantly, it also embodies the information systems so necessary to monitor all of these activities. Simply stated, the supply chain encompasses all of those activities associated with moving goods from the raw-materials stage through to the end user." In many organizations, materials form the largest single expenditure item, accounting for nearly 50 to 65 % of the total expenditure. With competition growing by the day, cost reduction in business operations and yet making available various products to customers , as per their requirement, come into sharp focus. Maintaining a flawless supply chain across all its operations thus becomes absolutely necessary for any business. Importance of supply chain management need not be over emphasized as it has become the cutting edge of business, after product quality and manufacturing capabilities of any business firm.
49
TODAYS SCENARIO OF SUPPLY CHAIN MANAGEMENT: If we take the view that Supply Chain Management is what Supply Chain Management people do, then in 1997 Supply Chain Management has a firm hand on all aspects of physical distribution and materials management. Seventy-five percent or more of respondents included the following activities as part of their company's Supply Chain Management department functions: Inventory management Transportation service procurement
Materials handling Inbound transportation Transportation operations management Warehousing management Moreover, the Supply Chain Management department is expected to increase its range of responsibilities, most often in line with the thinking that sees the order fulfillment process as one co-ordinate set of activities. Thus the functions most often cited as planning to formally include in the Supply Chain Management department are: Customer service performance monitoring Order processing/customer service Supply Chain Management budget forecasting
On the other hand, there are certain functions which some of us might feel logically belong to Supply Chain Management which companies feel are the proper domain of other departments. Most difficult to bring under the umbrella of Supply Chain Management are: Third party invoice payment/audit Sales forecasting Supply Chain Management Tomorrow: The future for Supply Chain Management looks very bright. Two major trends are Customer service focus and Information technology.
51
OBJECTIVES
52
OBJECTIVES OF THE STUDY: To design the pipeline grid across india for smooth transportation of LPG and make a strategy for cost effectiveness. To minimise the logistic cost by using pipeline grid. To get an exposure of the actual working environment within a multi national. To Study of IOCs LPG market share, all India supply and demand of LPG and present LPG demand and forecasting future demand. To Study of supply chain of LPG including road, railway and pipeline distribution network and suggesting improvements.
53
SOURCES: 1. REFINERIES-: There are 19 refineries in total out of which 10 are owned by IOC,2 by HPC , 3 by BPC ,ONGC holds 2 & 2 are owned by private companies i.e. Reliance & Essar Oil.
2. FRACTIONATORS:Only ONGC & GAIL are into exploration & production OF LPG. Thus only they own fractionators at present there are 12 fractionators out of which 6 are owned by GAIL, 5 are owned by ONGC & 1 is owned by Oil Duliajan.
54
3. IMPORTS-: Basically we import LPG (combination of propane & butane) from GULF Countries. Mainly from Saudi Arabia, Malaysia. IOC has 4 ports handling LPG imports they are at Kandla, Haldia, Vizag & Mangalore. IOC uses Time chartered (TC) or Voyage charted ships to import LPG. TCs are hired on a yearly basis or for a certain time period like 2-3 years. VC's are hired particular voyage only- as and when sudden increase in demand these are used. These are also used in coastal movement-transport of LPG along the coast line of India. TRANSPORTATION OF LPG:
LPG is transported to the bottling plants by 3 modes which are as follows; 1) RAIL- fixed proportion 2) ROAD- costliest 3) PIPELINE- most reliable one
PIPELINES-: The easiest and safest mode of transporting LPG is through pipelines. On the other hand it is challenging as well as tough job to establish pipelines across country. As once you have established the pipelines it is not possible to change the capacity of the pipelines.
55
Benefits of Pipelines Safer mode of transportation Environment friendly Least energy requirement Lowest maintenance costs Minimal impact on land use pattern Negligible loss of product in transit High reliability
RAILWAYS:Rails are the cheapest mode of transporting LPG but meanwhile the availability of the tracks as well as the stations are in the hands of the Government .LPG is loaded into containers called as tank wagons which have capacity of 37.5 MT( for 8 wheeler tank wagons) and unloaded at the nearest bottling plant. To unload LPG from the tank wagon, bottling plants should install separate machinery. Not all bottling plants have this feature as not all the bottling plants have rail availability.
56
ROAD:To transfer LPG through roads costs highest,as well as it is unsafe also that is high amount of security if we transfer LPG through roads. Trucks of 18 MT capacity is used to carry bulk LPG.As it is the most costly mode of transporting LPG it should be minimize to maximum.
57
COASTAL-: Whenever there is excess an excess of production at RIL, Jamnagar. The material is moved from Jamnagar to other coastal areas like Kandla, Mangalore, Halsia & Vizag. Pipeline transport: It is the transportation of goods through a pipe. Most commonly, liquids and gases are sent, but pneumatic tubes using compressed air can also transport solid capsules. As for gases and liquids, any chemically stable substance can be sent through a pipeline. Therefore sewage, slurry, water, or even beer pipelines exist; but arguably the most valuable are those transporting crude petroleum and refined petroleum product including fuels: oil (oleoduct),natural gas (gas grid), and befouls. There is some argument as to when the first crude oil pipeline was built. However, some say pipeline transport was pioneered by Vladimir Shukhov and the Bramble company in the late 19th century. For natural gas, pipelines are constructed of carbon steel and vary in size from 2 to 60 inches (51 to 1,500 mm) in diameter, depending on the type of pipeline. The gas is pressurized by compressor stations and is odorless unless mixed with a mercaptan odorant where required by a regulating authority.
Types by transport function: In general, pipelines can be classified in three categories depending on purpose: Gathering pipelinesGroup of smaller interconnected pipelines forming complex networks with the purpose of bringing crude oil or natural gas from several nearby wells to a treatment plant or processing facility. In this group, pipelines are usually short- a couple of hundred meters- and with small diameters. Also sub-sea pipelines for collecting product from deep water production platforms are considered gathering systems.
58
Transportation pipelinesMainly long pipes with large diameters, moving products (oil, gas, refined products) between cities, countries and even continents. These transportation networks include several compressor stations in gas lines or pump stations for crude and multi products pipelines.
Distribution pipelinesComposed of several interconnected pipelines with small diameters, used to take the products to the final consumer. Feeder lines to distribute gas to homes and businesses downstream. Pipelines at terminals for distributing products to tanks and storage facilities are included in this group. Construction When a pipeline is built, the construction project not only covers the civil work to lay the pipeline and build the pump/compressor stations, it also has to cover all the work related to the installation of the field devices that will support remote operation. The pipeline is routed along what is known as a 'right of way'. Pipelines are generally built using the following stages: 1. Route (right of way) Selection 2. Surveying the route 3. Clearing the route 4. Trenching - Main Route and Crossings (roads, rail, other pipes, etc.) 5. Installing the pipe 6. Installing valves, intersections, etc. 7. Covering the pipe and trench Russia has Pipeline Troops as part of the Rear Services, who are trained to build and repair pipelines. Russia is the only country to have Pipeline Troops.
59
OperationField devices are instrumentation, data gathering units and communication systems. The field Instrumentation includes flow, pressure and temperature gauges/transmitters, and other devices to measure the relevant data required. These instruments are installed along the pipeline on some specific locations, such as injection or delivery stations, pump stations (liquid pipelines) or compressor stations (gas pipelines), and block valve stations. The information measured by these field instruments is then gathered in local Remote Terminal Units (RTU) that transfer the field data to a central location in real time using communication systems, such as satellite channels, microwave links, or cellular phone connections. Pipelines are controlled and operated remotely, from what is usually known as The Main Control Room. In this center, all the data related to field measurement is consolidated in one central database. The data is received from multiple RTUs along the pipeline. It is common to find RTUs installed at every station along the pipeline.
60
The SCADA System for pipe lines The SCADA system at the Main Control Room receives all the field data and presents it to the pipeline operator through a set of screens or Human Machine Interface, showing the operational conditions of the pipeline. The operator can monitor the hydraulic conditions of the line, as well as send operational commands (open/close valves, turn on/off compressors or pumps, change set points, etc.) through the SCADA system to the field. To optimize and secure the operation of these assets, some pipeline companies are using what is called Advanced Pipeline Applications, which are software tools installed on top of the SCADA system, that provide extended functionality to perform leak detection, leak location, batch tracking (liquid lines), pig tracking, composition tracking, predictive modeling, look ahead modeling, operator training and more.
ImplementationAs a rule pipelines for all uses are laid in most cases underground. However in some cases it is necessary to cross a valley or a river on a pipeline bridge. Pipelines for centralized heating systems are often laid on the ground or overhead. Pipelines for petroleum running through permafrost areas as Trans-Alaska-Pipeline are often run overhead in order to avoid melting the frozen ground by hot petroleum which would result in sinking the pipeline in the ground.
MaintenanceMaintenance of pipelines includes checking Cathodic protection levels for the proper range, surveillance for construction, erosion, or leaks by foot, land vehicle, boat, or air, and running cleaning pigs, when there is anything carried in the pipeline that is corrosive. US pipeline maintenance rules are covered in Code of Federal Regulations(CFR) sections, 49 CFR 192 for natural gas pipelines, and 49 CFR 195 for petroleum liquid pipelines. In the US, onshore and offshore pipelines used to transport oil and gas is regulated by the Pipeline (PHMSA). Certain offshore pipelines
Used to produce oil and gas are regulated by the Minerals Management Service (MMS). In Canada, pipelines are regulated by either the provincial regulators or, if they cross provincial boundaries or the Canada/US border, by the National Energy Board (NEB). Government regulations in Canada and the United States require that buried fuel pipelines must be protected from corrosion. Often, the most economical method of corrosion control is by use of pipeline coating in conjunction with cathodic protection and technology to monitor the pipeline. Above ground, cathodic protection is not an option. The coating is the only external protection.
Pipelines and geopoliticsPipelines for major energy resources (petroleum and natural gas) are not merely an element of trade. They connect to issues of geopolitics and international security as well, and the construction, placement, and control of oil and gas pipelines often figure prominently in state interests and actions. A notable example of pipeline politics occurred at the beginning of the year 2009, wherein a dispute between Russia and Ukraine ostensibly over pricing led to a major political crisis. Russian state-owned gas company Gazprom cut off natural gas supplies to Ukraine after talks between it and the Ukrainian government fell through. In addition to cutting off supplies to Ukraine, Russian gas flowing through Ukrainewhich included nearly all supplies to Southeastern Europe and some supplies to Central and Western Europe was cut off, creating a major crisis in several countries heavily dependent on Russian gas as fuel. Russia was accused of using the dispute as leverage in its attempt to keep other powers, and particularly the European Union, from interfering in its "near abroad".
Future Plans: The demand for LPG (Liquified Petroleum Gas) as domestic fuel in the Northern, Central and Western regions is being met from indigenous LPG production from oil refineries and from gas processing units. Besides domestic LPG production sources, the deficit in demand-Supply is being met through import of LPG at Kandla on the West coast.
62
Increasing demand for LPG has also put tremendous pressure on the rail/road network. Accordingly, requirement of LPG pipeline starting from Kandla port up to Loni was identified and world's longest LPG pipeline was commissioned by GAIL to facilitate transportation of imported LPG and LPG production from the indigenous units at Jamnagar to the northern region. DESIGN CAPACITY: 2.5 MMTPA Risk Involved in transporting bulk LPG Through cross country pipeline LPG is stored in Liquid form under high pressure conditions. When released in air it possesses the following risk:

Highly flammable Settles and flows along ground High liquid to vapor ratio High increase in pressure due to temperature rise Vaporizes rapidly, lowering temperature which may cause frost burn Low viscosity and poor lubrication Risk of vapor cloud explosion Risk of BLEVE
63
METHODOLOGY
64
METHODOLOGY
Collected and organized the data for LPG demand and supply, sources of LPG and modes of distribution with their details like costs, capacities etc. For ease and detail of analysis, we have divided India into four regions namely North, South, East and West.
Analyzing and Interpreting the secondary data and information available with IOCL-HO (Mumbai). To study of new pipe line where there is mismatch of demand and supply across India.
65
Applying various tools like SECONDARY DATA AND EXPERIENCED SURVEY to bring out various results. Experienced survey is like with whom we are dealing the person who are experienced and has sound knowledge on this topics. The proposed study is DESCRIPTIVE AND CAUSAL in nature. In this study the project is very much descriptive and cause and effect type. To see the cause and effect of the problem, we have independent variableCOST and depedent variable SAVING. Analyzed LPG pipelines all over India.
FACTORS NEEDED TO SET-UP PIPELINE: 1. Availability of Source 2. Demand and Consumption Point i.e. Plant 3. Geographical area 4. Distance 5. Future Demand 6. Capital cost 7. Savings 8. Pay Back Period
66
BOTTLING PLANTS OF IOC
67
NORTH
1.Allahbad 2.Kanpur 3.Lucknow 4.Trisundi 5.Varanasi 6.Aligarh 7.Etawah 8.Farukhabad 9.Lakhmipur Kheri 10.Loni 11.Mathura 12.Pattikalan 13.Shahjanapur 14.Haldwni 15.Haridwar 16.Ajmer 17.Bikaner 18.Jaipur 19.Jhunjhunu 20.Delhi
68
EAST
30.Akola 31.Manmad 32.Pune 33.Ahmedabad 34.Bhabnagar 35.Gandhar 36.Hazira 37.Rajkot 38.Baroda 39.Bhopal 40.Guna 41.Ujjain 42.Raipur
SOUTH
43.Coimbatore 44. Ennore 45.Erode 46.Ilayangudi 47.Madurai 48.Mannargudi 49.Myladaturai 50.Salem 51.Trichy 52.Chenglepet 53. Cpcl 54. Cherlapalli 55.Cuddapah 56.Thimmapur 57.Vijaywada 58.Vizag 59. Belgaum 60.Devanagonthi 61.Shimoga 62.Calicut 63. Cochin 64.Quilon
WEST
66. Budge Budge 67.Durgapur 68. Kalyani 69. Raninagar 70. Malda 71. Patna 72.Barauni 73.Bokaro 74.Jamshedpur 75.Balasore 76. Jharsuguda 77. Bishalgarh 78. Rangpo 79. Port Blair 80.Bongaigaon (Brpl) 81.Guwahati (Sarpara) 82.North Guwahati 83.Silchar 84. Duliajan
21.Mpur Khadar 22.Gurgaon 23.Karnal 24.Jalandhar 25.Nabha(Patiala) 26.Baddi 27.Una 28.Jammu 29.Leh
65.Pondichery
85. Gopanari(Digboi) 86. Kimin 87.Dimapur 88. Mualkhang 89.Sekmai
69
IMPORTS & REFINERIES OF IOC:
70
INPUTS REQUIRED FOR DESIGNING PIPELINE: Pay Back Period < 15 years Pipeline Tariff = Rs.0.30 / MT/KM Road Expenses = Rs.2.4/ MT/KM Cost of Pipe line= 1 crore /KM Projected Bottling Plant capacities in the year 2016-17.
We can also say inputs as THUMB RULE. During applying these rules, we have strictly adhered to these inputs so as to get suitable and correct result.
SECONDARY DATA:
BOTTLING PLANT CAPACITY (TMTPA) Location ALLAHABAD ALIGARH ETAWAH FARUKHABAD KANPUR PATTIKALAN(KASHIPUR) LAKHIMPUR KHERI LUCKNOW LONI MATHURA SHAHJAHANPUR TRISUNDI VARANASI MUZAFFARNAGAR 71 EXISTING (as of 01.10.11) 60 15 23 30 120 23 23 90 120 120 45 11 60 0 14-15 120 60 60 60 180 60 30 120 180 120 120 11 120 0 1617 120 60 60 60 240 60 30 120 180 150 120 60 120 60 2122 120 60 60 60 240 60 30 150 180 180 120 60 120 60
S'PUR/M'NGAR MEERUT BAREILY/MORADABAD GORAKHPUR SUB TOTAL HALDWANI HARIDWAR DEHRADOON SUB TOTAL AJMER BIKANER JAIPUR JHUNJHUNU JODHPUR/PALI UDAIPUR ALWAR KOTA SUB TOTAL DELHI (TIKRIKALAN) M'PUR KHADAR SUB TOTAL GURGAON KARNAL HISAR/ROHTAK SUB TOTAL JALANDHAR NABHA (PATIALA) BHATINDA /AMRITSAR SUB TOTAL BADDI UNA SUB TOTAL JAMMU LEH SUB TOTAL NR TOTAL BUDGE BUDGE DURGAPUR KALYANI RANINAGAR MALDA 72
0 0 0 0 740 60 60 0 120 60 30 90 15 0 0 0 0 195 240 180 420 60 120 0 180 180 120 0 300 30 30 60 30 5 35 2050 120 120 120 60 15
0 0 0 60 1301 120 60 0 180 120 60 180 30 60 60 0 0 510 240 240 480 120 180 0 300 180 240 120 540 30 60 90 60 15 75 3476 180 120 180 120 30
60 0 0 60 1560 120 60 60 240 120 60 180 30 60 60 60 30 600 240 300 540 120 180 60 360 180 240 120 540 30 60 90 60 15 75 4005 180 120 180 120 60
60 60 60 120 1800 120 60 60 240 120 60 180 30 60 60 60 30 600 240 300 540 180 180 60 420 180 240 120 540 30 120 150 60 15 75 4365 180 180 180 120 60
MURSHIDABAD SUB TOTAL PATNA BARAUNI BHAGALPUR MUZAFFARPUR SUB TOTAL BOKARO JAMSHEDPUR SUB TOTAL BALASORE JHARSUGUDA BEHREMPORE SUB TOTAL BISHALGARH SUB TOTAL RANGPO SUB TOTAL PORT BLAIR SUB TOTAL BONGAIGAON (BRPL) GUWAHATI (SARPARA) NORTH GUWAHATI SILCHAR DULIAJAN GOPANARI(DIGBOI) SUB TOTAL KIMIN SUB TOTAL DIMAPUR SUB TOTAL MUALKHANG SUB TOTAL SEKMAI SUB TOTAL ER TOTAL AKOLA (DHANAJ) MANMAD PUNE NAGPUR KOLHAPUR 73
0 435 120 60 0 0 180 30 60 90 60 15 0 75 12 12 11 11 11 11 30 23 60 20 23 30 186 8 8 11 11 11 11 15 15 1045 60 60 30 0 0
0 630 120 120 90 60 390 60 120 180 60 30 30 120 30 30 11 11 11 11 30 23 120 60 23 30 286 11 11 21 21 22 22 30 30 1742 60 60 120 60 0
60 720 120 120 120 60 420 60 120 180 60 30 30 120 30 30 11 11 11 11 30 23 120 60 23 30 286 11 11 21 21 22 22 30 30 1862 60 60 120 60 30
60 780 180 120 120 120 540 60 120 180 60 30 60 150 30 30 11 11 11 11 30 23 120 60 23 30 286 11 11 21 21 22 22 30 30 2072 60 60 120 60 60
AURANGABAD SUB TOTAL AHMEDABAD (SANAND) BHAVNAGAR GANDHAR HAZIRA RAJKOT BARODA KANDLA SUB TOTAL BHOPAL GUNA UJJAIN JABALPUR GWALIOR SUB TOTAL RAIPUR SUB TOTAL WR TOTAL COIMBATORE ENNORE ERODE ILAYANGUDI MADURAI MANNARGUDI MYLADATURAI SALEM TRICHY CHENGLEPET CPCL VELLORE TIRUNELVELLI VIRUDHACHALAM VIRUDHUNAGAR SRIPERUMPUDUR TIRUVANAMALAI TANJORE KRISHNAGIRI DHARAMPURAM SUB TOTAL CHERLAPALLI CUDDAPAH THIMMAPUR 74
0 150 120 30 30 60 90 60 0 390 90 30 60 0 0 180 60 60 780 60 180 60 15 60 11 11 45 60 60 120 0 0 0 0 0 0 0 0 0 682 120 60 60
0 300 120 30 30 60 90 120 30 480 120 120 60 60 30 390 90 90 1260 120 180 120 60 120 11 11 60 120 120 120 60 30 0 0 0 0 0 0 0 1132 150 150 120
30 360 120 60 60 60 90 120 30 540 120 120 120 60 30 450 90 90 1440 120 180 120 60 120 11 11 60 120 120 120 60 30 60 30 60 30 30 30 30 1402 150 150 120
60 420 120 60 60 60 90 120 30 540 180 120 120 120 60 600 90 90 1650 120 180 120 60 120 11 11 60 120 120 120 60 30 60 30 60 30 30 30 30 1402 150 150 120
VIJAYWADA VIZAG KAVALI KARIMNAGAR/KURNOOL SUB TOTAL BELGAUM DEVANAGONTHI SHIMOGA MANGALORE MYSORE SUB TOTAL CALICUT COCHIN QUILON SUB TOTAL PONDICHERY SUB TOTAL SR TOTAL
45 60 0 0 345 60 180 60 0 0 300 45 180 60 285 30 30 1642
75 90 60 0 645 120 240 120 60 60 600 120 180 120 420 30 30 2827
75 90 60 60 705 120 240 120 120 60 660 120 180 120 420 30 30 3217
75 120 120 60 795 120 240 120 120 120 720 120 180 120 420 30 30 3367
*Green color mark place is under construction.
75
OBSERVATIONS & ANALYSIS
76
OBSERVATIONS & ANALYSIS

Concentration of production: Earlier, we have seen that the production of LPG is from three sources viz. refineries, fractionators and imports. The sources are distributed across the country and so are the markets. We learnt that most of the imports are from Saudi Arabia which is near to the west of India. So obviously, LPG is imported to the ports at the west coast of India and later distributed to the other parts by land. Similarly, even crude is imported from Saudi Arabia and so imported at the ports on the west coast. Observing these points, we wanted to analyze the distribution of sources across India and if they are meeting the demands of their locality. Broadly, we divided India into four major regions viz. North, East, West and South and categorized all the sources of LPG (IOC, BPC, HPC, RIL, ONGC) into the four categories. On doing so, we found a very huge imbalance in the production and demand of LPG in the corresponding regions.
77
The maximum consumption is at the north region (32%) followed by the south region (30%) where the production is only 11% and 15% respectively. So the difference is 21 percentage points at north and 15 percentage points at south which is equivalent to 3348 TMT and 2852 TMT respectively. The maximum production is at the west (67%) where the consumption is only 25%. So, the material has to move from west to north and south.
78
These imbalances infer that the material, a total of 6200 TMT, has to be transported from the source to the markets to meet the respective demands. With such huge imbalances, a lot of material has to be transported which will cost millions of dollars. Rs. 1480 is the average price to transport 1 MT of LPG for 1km and if the average distance between the reference points of north (Delhi) and west (Kandla) is 1100 km then the average cost of transporting 3348 TMT is 1480 * 3348 * 1000 * 1100 = Rs. 5,450,544,000,000 per annum Similarly, the average transportation from west (Kandla) to south (Bangalore) is 1480 * 2852 * 1000 * 1800 = Rs. 7,597,728,000,000 per annum. DETAILED EXPLANATION OF NEW DELHI- PANIPAT PIPE LINE:
79
Background: Industry transports LPG from its LPG Refinery Facility to various bottling plants in North India through road and rail. Demands in mainly New Delhi in 11-12 is 0.42 MMT 80 % thru Road & 20 % Rail Frequent Road Accidents Industry on Look out for Alternate safe mode of transportation The project aims at Decongesting of the roads near tikrikalan, Khadar. Reduce the Bulk LPG Tank truck movement. Improve the Safety in Road transportation Promote environment protection by shifting bulk LPG Movement from Road to Pipeline transfer Savings in cost, transit loss & improved safety Provide Safe & secure mode of Transportation
80
Pipeline Schematic
Calculation:
TMTPA= thousand metric ton per annum MMTPA=million metric ton per annum KM=kilometer Cr=crore
81
Forecasted demand of Delhi (TIKRIKALAN)is extremely high i.e. 240 TMTPA. This proposed pipeline can help to avoid the mismatch of demand-supply in the year 2016-17.
Can help to its nearby district like Gurgaon, Rohtak, Noida, Jind, Hisar etc. Analyzed the data of year 16-17 and proposed one suitable pipeline for it.
Other costs also associated in this pipe lines are Land & RoU Station mechanical, Electrical & Instrumentation Station civil works Miscellaneous expenses* including contingency Interest & Misc charges
Likewise we have found other 7 feasible proposed pipe lines. Everything is calculated using same formula and secondary data.
82
FINDINGS
83
84
PIPELINE DETAILS
SL No.
PROPOSED LINE
REMARKS
APPROX LENGTH IN KMs
Kochi-Coimbatore-ErodeSalem-Trichy Hyderabad-WarangalKarimnagar Newdelhi-Panipat
PROPOSED LINE
458
PROPOSED LINE
197
PROPOSED LINE
96
Mumbai-Nashik-ManmadAkola-Nagpur Panipat-MuzafrnagarBareilly-Shahjanpur-Kheri Mathura-Gwalior-GunaBhopal-Ujjain Ennore-Tiruvallur-Cuddapah
PROPOSED LINE
672
PROPOSED LINE
517
PROPOSED LINE
697
PROPOSED LINE
268
Guna-Bhopal-Ujjain
PROPOSED LINE
321
85
Kandla Loni Panipat New Pipeline 1521
10
Rewari Mathura Allahabad Koyali Sanand Patan
New Pipeline
620
11
New Pipeline 12 Vizag Secunderabad
110
Augmentation in existing pipeline
589
13
Paradip Haldia Budge Budge - Kalyani Durgapur Durgapur Barauni Varanasi
New Pipeline
673
14
New Pipeline
830
15 Mangalore Bangalore 16 Ennore Trichy 17 Mumbai Chakan New Pipeline 166 New Pipeline 382 New Pipeline 376
Finally we have found 8 feasible pipe lines to avoid mismatch of demand supply in these areas with a profit of approx. 266 Crores.
86
RECOMMENDATIONS
In the current scenario, these are the 8 possible LPG pipelines which are feasible according to Thumb Rule. If these pipe lines will be set up then almost 90% of the country will be covered by the pipelines. IOC should focus on the extreme Eastern region so that whole India can get LPG easily without any hesitation. It should also work on the top of Northern Region like Jammu, Leh, and Srinagar etc and hill area Himachal Pradesh. Already it has a strong network of LPG pipelines in Southern, Northern and Eastern Region. It should focus on the western region to make its pipeline networking more stronger. As the taxes vary from state to state, it is not wise to calculate the profit after tax (PAT) to assess the manager. Instead, operating profit makes a better performance measure in this case. As the demand varies from state to state or market to market it is not right to assess the plant managers on the profit they make in numbers. So the performance measure to be used here is a ratio. The ratio should be: Operating profit/cost of goods sold
87
CONCLUSION
Can easily handle the mismatch of demand- supply in the year 2021-22 if these proposed pipe lines will function. In future the projected demand will gradually decrease mostly after the year 16-17 as the demands will be fulfilled significantly by IOC, HPC, and BPC jointly. a profit center empowers the plant manager to choose his/her supply sources and also his markets or price of the material to maximize the profits of his plant. But as the price of LPG is fixed by the government the plant manager has to reduce the cost as much as possible. Pricing factors of LPG: To know what measures a plant manager can take to reduce the price of LPG it is necessary to study how LPG is priced. Free/Fuel-On-Board (F.O.B.) price: This is the actual price of LPG at the time of loading into the ship at the port of the country exporting it. Ocean freight: It is the cost of transportation of LPG from the exporting country to the importing country by ship. Insurance: It is the cost of shipping insurance. Ocean loss: A small portion of loss (0.305%) is considered during the shipping. Port dues & Wharfage: The price the import port charges for disporting the material.
88
Import Parity Price (IPP): The sum of all the costs listed above. Even if the plant manager wishes to procure LPG from any fractionator or refinery, he has to buy LPG at IPP of the nearest port.
Terminal charges: The charge for using the terminals at the port to store LPG. Freight charges: The cost of transportation of bulk LPG to the bottling plant. Fill cost: The cost of bottling.
89
ANNEXURE
Find the attachment with it i.e. the Excel Sheet.
90
REFERENCES
http://www.iocl.com http://www.hpcl.com http://www.bpcl.com http://myiris.com/shares/research/motilal/INDOILCO_20100129.pdf http://www.google.co.in/search en.wikipedia.org/wiki Indian Oil official ppt & excel sheet Indian Oil monthly magazine (april,may & June)
91

IOCL - Final Report by JYOTI &amp ARSHE From Alliance University

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

IOCL - Final Report by JYOTI &amp ARSHE From Alliance University

Загружено:

Авторское право:

Доступные форматы

Summer Internship Project Report On

SUPPLY CHAIN MANAGEMENT IN LPG

Under the kind guidance of

Alliance University-School of business, Bengaluru

Master of Business Administration

(Signature of Faculty Guide) Dr. Satish Kumar

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

OIL INDUSTRY OVERVIEW Background

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

OIL INDUSTRY STRUCTURE

Fig.1: Structure of Oil Industry in India

Oil Industry Dynamics in India

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

Panipat Refinery: P.O. Panipat Refinery, Panipat-132140(Haryana)

Bongaigaon Refinery: P.O. Dhaligaon Dist. Chirang, Assam - 783 385

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

Southern Region: IndianOil Bhavan, 139, Nungambakkam High Road

R&D Centre R&D Centre: Sector 13 Faridabad -121 007(Haryana)

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

VISION, MISSION AND VALUES

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

OBJECTIVES & OBLIGATIONS OF IOCL

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

PRODUCTS PROFILE (IOCL)

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

SWOT OF THE COMPANY

Major weakness for the company is the

Petrochemical product development technology

Technological drawback, as compared to some major foreign player

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

ORGANIZATION STRUCTURE OF IOCL:

Fig. 4: Organizational Structure of IOCL

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

INTRODUCTION TO FOSSIL FUELS

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

LIQUEFIED PETROLEUM GAS (LPG)

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

There are many advantages which can be associated with LPG:

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

A COMPARISION BETWEEN CNG AND LPG:

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

WHY LPG IS BETTER:

JYOTIRAMAN & ARSHE ; ALLIANCE UNIVERSITY SCHOOL OF BUSINESS

LPG waiting list stands fully liquidated.