Oil & Natural Gas Corporation and Cairn India have reached an agreement to build a $340 million pipeline to transport crude oil from Barmer district of Rajasthan to Gujarat.

The cost of the pipeline will be shared between both the companies in a ratio of 70:30. Cairn-ONGC will first build a 340 km line to Indian Oil Corporation's Viramgam pipeline terminal in Gujarat. Viramgam is connected by pipelines to IOC's Koyali (Gujarat), Panipat (Haryana) and Mathura (Uttar Pradesh) refineries, which will be the potential customers of Rajasthan crude.

Smaller pipeline can be built to the coast, or Jamnagar where Reliance Industries and Essar Oil have refineries. Work on the project is scheduled for completion within 12-18 months.

In the second phase, the network will be extended to Jamnagar and Vadinar in Gujarat, where the refineries of both Reliance and Essar are located. The company is in talks with various refineries for selling the crude.

But cairn India has not confirmed the deal sofar.

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