Kerala wants ‘right of first use’ pact with BPCL before sell-off

 It is to ensure steady supply of raw materials for firms in upcoming Petrochemical Park

Published: 01st June 2021 02:03 AM  |   Last Updated: 01st June 2021 02:32 PM   |  A+A-

Kerala Industries Minister P Rajeeve (Photo | A Sanesh, EPS)

Kerala Industries Minister P Rajeeve (Photo | A Sanesh, EPS)

Express News Service

KOCHI:  Ahead of the proposed privatisation of BPCL, the Kerala government is pushing for a ‘right of first refusal’ with the PSU’s Kochi refinery unit to ensure a steady supply of the raw materials for the upcoming Petrochemical Park.

“We plan to sign an MoU with BPCL so that the Petrochemical Park will get a  steady supply of raw materials from BPCL, even after privatisation,”  said Industries Minister P Rajeeve.

The state government’s  Petrochemical Park is coming up in 482 acres of land at  Ambalamugal in Kochi, adjacent to BPCL’s Kochi refinery.

“The companies in the Petrochemical Park should get the ‘first right of refusal’,” he said. This means, under the planned MoU, BPCL would be able to sell the products to buyers outside the park only after meeting the demand within the park. This agreement would also provide a cushion for the state government that the new owner of BPCL would meet the park’s demands.

READ MORE HERE | Kerala Industries Minister P Rajeeve interview: PSUs asked to submit master plan, digital platform to monitor progress

Rajeeve, however, added that the LDF government would strongly oppose the sell-off of the blue-chip PSU.

BPCL’s  Rs 6,000-crore Propylene Derivatives Petrochemical Project (PDPP),  which was commissioned by Prime Minister Narendra Modi in February this year, produces acrylic acid, acrylates and oxo-alcohol.

The products find application in paints, cosmetics, inks, pharmaceutical products, textile products, plasticisers, and much more.

The Kerala government hopes to attract big companies in the paint, cosmetic and pharmaceutical industries to the Petrochemical Park on the back of the abundant supply of raw materials from BPCL. A part of the park is earmarked exclusively for pharmaceutical industries.

Right now, the products from the PDDP are shipped to Maharashtra and Gujarat, where most of the big paint, cosmetic, and other companies are located though  Kerala is a big market for paints and pharmaceutical companies. 

Rajeeve said the Petrochemical Park will be completed within 30 months. “We plan to complete the Petrochemical Park in 30 months,” the industries minister said.

The state government is establishing the Petrochemical  Park via Kerala Industrial Infrastructure Development Corporation  (Kinfra), which will provide basic facilities including water, power,  pollution control plant, waste treatment facilities, and gas connectivity from the GAIL pipeline, officials said, adding that Kinfra has received about 20 applications from companies for starting business ventures at the park.

Officials said the Petrochemical Park will also benefit from BPCL polyols project, which is coming up at the Kochi refinery. The  PSU is investing Rs 11,130 crore for the project.

The raw material for the project is 250 kilo tonne per annum of propylene which can be produced in the refinery and the project is proposed to complete during 2023-24.


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