The board of Hindustan Petroleum Corp (HPCL) cleared a plan to set up a joint venture company with the Rajasthan government to set up a 9 million tonne (mn t) a year refinery in the next four years.
The joint venture, in which HPCL will hold 74 percent stake and the Rajasthan government 26 percent, will implement the project at an investment of Rs 37,320 crore. The project involves setting up of an oil refinery and petrochemical complex at Barmer.
The state government gave in-principle approval for providing an interest free loan of Rs 3,736 crore per annum for 15 years from the date of commercial production. This is besides its commitment to pick up 26 percent stake in the project.
HPCL also received assurance from the state government on continuous supply of 28 MGD of water for the project from Indira Gandhi canal and about 3,500 acre of land for refinery, terminal and township near Leelala area in Barmer.
Originally, state-owned Oil and Natural Gas Corp (ONGC), which owns 30 per cent interest in the Barmer oilfields of Cairn India, had in 2005 committed to building the refinery but later it started soft-peddling the project.
The refinery will process crude oil produced in the Rajasthan block of Cairn India as well as Arab mix crude.
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