Commissioning of SPM facility by M/s Bharat Petroleum Corporation Ltd.–Kochi Refinery Ltd., Customs procedures Reg - Customs - 06/2008

OFFICE OF THE COMMISSIONER OF CUSTOMS CUSTOM HOUSE : COCHIN-682 009. TRADE FACILITY NO. 06/2008. Sub: Commissioning of SPM facility by M/s Bharat Petroleum Corporation Ltd. Kochi Refinery Ltd., Customs procedures Reg: M/s. Bharat Petroleum Corporation Ltd (BPCL) has set up a Single Point Mooring System (SPM) for discharge of bulk liquid cargo, mainly to cater to their raw material requirements of Crude Oil. The facility consists of an off-shore buoy set up in Indian Customs waters, off-Puthuvypeen Coast, apprx 19.5 km from the land mass. The geographical location of the buoy, which is located mid-sea, is defined by the following Geodetic co-ordinates: Latitude -09 59 49.93 N Longitude-76 02 30.73 E M/s Cochin Port Trust has intimated that the facility has been created in terms of sec.35 of the Major Ports Act, 1963 and requested to notify this area as an approved customs landing place. Accordingly Notification No. 9/2007 dated 26.11.2007 is issued by the Custom House notifying this as an area for the limited purpose of discharge of Crude oil from oil tankers. The scheme of things envisaged is detailed below:- Oil tankers shall be berthed in the SPM buoy, set up at outer-sea, as mentioned above. Unlike in the case of tankers berthing at the existing Oil Tanker Berths at Cochin Port, the crude oil from tankers berthing at SPM would be discharged from the tankers to the tanks located in an area earmarked as Shore Tank Farm (STF),. The shore tank farm is set up at Puthuvypeen in the area notified as Puthuvypeen SEZ vide Govt. of India, Ministry of Commerce Industry Notification dated. 2 nd Nov. 2006 (issued from file F.No. F2(2)/2/2002-EPZ). However, the SPM Buoy is not part of the SEZ. The STF is located in the land area which is about 19.5 km. from the SPM buoy. The crude oil from the oil tankers berthed at SPM shall be brought to the SEZ directly by pumping through the under-water pipelines installed in sea. The crude oil received will be stored initially in the STF tanks. Thereafter, as and when required, the crude oil shall be taken to the Refinery tanks at Ambalmugal, via NTB, through pipelines. The pipeline distance from Puthuvypeen SEZ to NTB is estimated at 8.75 km. and from there, to Refinery is approximately 16 km. The crude oil so received in the Refinery will be stored at the tanks located in Main Tank Farm or Additional Tank Farms of M/s BPCL at Ambalamugal, from where, clearances shall be allowed against Ex-Bond Bs/E. For smooth implementation of the above, following Customs procedures shall be followed:- A. Procedure for discharge of imported Crude Oil: i). Into-Bond Bill of Entry shall be filed at Cochin Custom House for the imported quantity, before the tanker vessel berths at SPM. ii). Since the SPM Buoy (where the oil tankers are to berth) is within Customs Area outside the notified SEZ whereas, the Puthuvypeen Shore Tank Farm (which is the first-point of receipt of Crude Oil) is within the notified SEZ area, all formalities connected with berthing/boarding of vessel shall be attended to by a proper officer of Cochin Custom House. Further, since there exists no facility for quantification at SPM, supervision of discharge of crude oil to STF and quantification of crude oil so received in STF tanks (including the quantity available in connecting pipeline from SPM to STF) shall be also attended by the proper officers of Cochin Custom House, concurrence for which is already given by Development Commissioner (SEZ) also, as the cargo is not meant for SEZ operations. iii). Total quantity discharged shall be the sum of quantity received in STF tanks and the Pipe line quantity. Estimation of such quantity as per existing procedures including Dip measurements etc shall be continued as per existing instructions in this regard for Bulk liquid cargo. iv). It may happen that the capacity in STF Tanks are not sufficient to accommodate all the cargo discharged, especially in the case of bigger vessels. In such cases, simultaneous pumping (from Tanker vessel to STF tank and from STF tanks to Refinery Tanks) may be required to receive the full quantity from the tanker. In such cases, quantity received in Refinery tanks and change in pipeline content from STF to Refinery also shall be quantified and the quantity discharged from the vessel shall be the total of quantity received in STF tanks and quantity received in Refinery Tanks. v). The crude oil stored in STF tanks shall be later pumped to the bonded tanks in the Refinery. Quantity, so received in refinery tanks shall also be quantified as per existing procedures as per instructions in this regard for bulk liquid cargo. The quantity so estimated shall be noted by Preventive staff of Cochin Custom House, posted for the purpose. vi). For Customs purposes, the quantity so received at the STF tanks at SEZ shall be the relevant quantity and not the quantity finally received in Refinery Tanks. vii). (a) BPCL shall prepare initial intake certificates supported by the tank out-turn reports (OTR s) for tank receipt quantification and necessary calculations for Pipeline Content Change quantification. This initial intake certificate shall be certified by the authorized officer of Cochin Custom House posted in SEZ in the case of situation mentioned at para (iii) above and, by both authorized officer in SEZ as well as proper officer in-charge of Bonded cargo at BPCL-KRL tanks, in the case of situation covered under para (iv). (b) Subsequent receipt of the imported quantity from STF and connecting pipelines into the customs bonded tanks in the Refinery, will have to be accounted at Refinery, in the chronological order of shipment in which the tankers have discharged from SPM to the STF. After receipt of the full discharge quantity in the refinery bonded tanks, BPCL shall prepare the final intake certificate showing the receipt of the full landed quantity in the customs bonded tanks in various stages. This final intake certificate shall be submitted to the bond officer as proof of having received the full tanker receipt quantity in the bonded tanks. viii). Subsequently, the crude oil so warehoused in the Bonded tanks of Refinery shall be cleared against Ex-Bond B/E filed at Cochin custom House, on payment of customs duties, as per the procedures hitherto followed and the Ex-Bond Qty shall be debited from the Into Bond (warehouse) quantity. ix). If there is excess quantity noticed on discharge w.r.t quantity manifested, matter shall be dealt with as per the procedure presently followed, according to the provisions of Customs Act,1962 and instructions in this regard. BPCL will however ensure that the full quantity ascertained on discharge is received and accounted in the customs bonded tanks. B. Transhipment. i) There may be cases where, vessels with crude oil meant for other ports / refineries also may be berthed at SPM. Normally, in such cases, the quantity for each port shall be manifested separately, with separate Bills of lading. In such cases, transhipment shall be either (a) through daughter vessel(s) directly from the mother vessel , (b) the crude oil is first discharged and stored in the STF tanks and thereafter, the crude shall be shifted (transhipped) to another bonded Tank at a different port, In both the cases, the procedures prescribed for Transhipment shall be followed.. ii). If the cargo is received/warehoused under a single B/L and originally manifested for the refinery at Kochi, normally, requests for transshipment to other ports shall not be allowed. In such cases, such quantity shall be transshipped on filing Ex-bond B/E and on payment of customs duties at Cochin. It may be also noted that transhipment of imported Crude in all the above cases shall be subject to approval of Customs authorities and on compliance of applicable procedures in this regard. Transhipment of crude oil stored in STF tanks in SEZ will be subject to the approval of Development Commissioner SEZ also. C. Handling of Domestic crude Domestic cargo meant for BPCL also can be brought in SPM and subsequently, stored in STF tanks. Normally, domestic crude shall be stored in separate tank(s) earmarked in the STF area. However, in case of exigencies, such crude shall be stored in the other tanks also. In such cases also, total receipt quantity shall be estimated as the sum of tank receipt quantity and change in pipeline quantity, by following the procedures for quantification mentioned earlier. An intimation of such quantity of domestic crude stored in tanks meant for import crude shall be filed with Cochin Custom House, with copy of the Discharge quantity certificate duly endorsed by the proper officer of SEZ. It is the responsibility of the importers to account for import/domestic crude separately, to the satisfaction of Customs. D. Receipt of Crude Oil through COT: Whenever SPM is out of operation, BPCL might receive crude oil through tankers berthing at existing Cochin Oil Terminal (COT) For quantification of receipts of crude oil through the COT, the existing procedures for documentation and quantification shall be continued. In addition to the above broad guidelines and compliance of normal formalities for berthing, discharge, warehousing, clearance under Ex-bond B/E, Transhipment etc, it shall be the responsibility of M/s. BPCL to maintain the following:- 1). Separate accounts/Registers for imported and domestic crude. 2). Detailed accounts of discharge particulars for each vessel berthed at SPM; 3). Complete details of storing to and subsequent removal from STF tanks; 4). Details of transshipment. Such records shall be made available, as and when required, for verification. M/s. BPCL shall also intimate changes, if any, in the scheme of operations, in advance, so that appropriate modifications can be made in the procedures. Difficulties, if any, in implementing the above, shall be brought to the notice of undersigned immediately. Sd/- (D. D. INGTY) Commissioner F.No. C-1/33/2007 Cus Dated: 07.04.2008