The board of directors of Hindustan Petroleum Corp Ltd (HPCL) has approved the setting up of a nine-million tonne refinery and petrochemical complex at an estimated cost of Rs 37,000 crore at Barmer in Rajasthan.
“The board...has considered and recommended the Rajasthan Refinery Project for the approval of Government of India,” HPCL said in a notice to the bourses, adding that it will utilise crude from Cairn India Ltd’s Barmer block. “This refinery will also have capability to process other type of crudes.”
According to HPCL officials, the Rajasthan government has agreed to pick up 26% stake in the project. Rajasthan government will provide the requisite incentives to the project and the process of land acquisition is also in advance stage. Rajasthan government sources said has already acquired about 926 hectares.
Other partners may be inducted in the project at a later stage, sources said.
According to officials, half of the crude oil requirement at the proposed refinery at Barmer will be from the neighbouring oilfields of Cairn India.
An MoU will be signed by the Government of Rajasthan in presence of Petroleum Minister Veerappa Moily and Rajasthan Chief Minister Ashok Gehlot on March 13.
HPCL board earlier this week approved setting up of the proposed complex and also it approved expansion of the Bhatinda Refinery in Punjab from 9 million tonne to 11.2 million tonnes.
The Bhatinda Refinery is operated by HPCL-Mittal Energy Ltd an equal joint venture of HPCL and steel baron Lakshmi mittal. HMEL had last year commissioned the Rs 21,500 crore Guru Govind Singh Refinery at Bhatinda.
HPCL and Mittal Energy Investment PTE Ltd Singapore, an LN Mittal group company hold a 49% stake each in HEML while the remaining 2% is held by financial institutions.
Originally ONGC which owns 30% in Barmer oil fields of Cain India had in 2005 proposed to build the refinery but later opted out.