Hindustan Petroleum, Rajasthan government tie up for Rs 37,230 crore refinery

Hindustan Petroleum Corp Ltd and the Rajasthan government entered into a pact on Thursday for setting up a 9 mtpa (million tonnes per annum) capacity oil refinery-cum-petrochemical complex in Barmer district at an estimated cost of Rs 37,230 crore.

The project is expected to take about four years for going on stream after getting approval from the Government of India.

Raj Sudhansh Pant , the state's secretary of mines and petroleum, and K Murli , director of refineries at HPCL, signed the agreement in the presence of Petroleum Minister M Veerappa Moily, Rajasthan's chief minister Ashok Gehlot, among others.

Mr Moily said the project will fulfil long cherished dream of the people of the state and will accelerate economic growth and development in the region.

He said the proposed refinery has the potential to become an anchor industry for developing downstream and other service sector industries in and around the region.

Highlighting the aspects of the project, the Petroleum Minister said the proposed petrochemical complex will be the first such complex specifically designed to produce petrochemicals from the indigenous crude oil.

For the project, the state government has given in-principle approval for an interest free loan of Rs 3,736 crore every year for 15 years, starting from the commercial production to maintain its viability, besides equity participation subject to a minimum of 15 per cent and maximum of 26 per cent.

The Gehlot government has also assured continuous supply of 28 MGD (millions gallons per day) of water for the project from Indira Gandhi Canal and about 3,500 acres of land for refinery, terminal and township near Leelala area in Barmer.

Laxmi Panabaka , minister of state for petroleum, termed it a landmark decision and the Raj refinery will facilitate refinery capacity of the country.

Mr Gehlot said that the made laborious efforts to bring the refinery to the state of Rajasthan. He also said the refinery is the issue of the state for the last 10 years and he pressed his demands on several occasions.

Elaborating the details of the project, HPCL chairman and MD S Roy Choudhury the refinery will process crude oil produced in Rajasthan as well as Arab mix crude.

He said that environment protection and other aspects have been taken into consideration fully to run the project for which the state government of Rajasthan has agreed in principle to give necessary incentives in order to make the refinery a viable project.

Mr Choudhury said the project will have direct and indirect impact on economy of Rajasthan and generate employment.

Several MPs, state ministers, MLAs, senior officers from the state government and the HPCL were present on the occasion.

The proposed refinery is expected to develop sustainable amount of ancillary small scale units required for construction and maintenance of the refinery equipment, and also lead to development of huge township and related sectors.