Hindustan Petroleum Corp (HPCL), which proposed to set up a 9 million tonne a year refinery at Barmer in Rajasthan, has asked the oil ministry to give firm allocation of crude oil from Cairn India’s oilfields in the state.
The company has reportedly told the oil ministry that
its proposed Rs 24,000 crore refinery would be unviable in the absence of supply of the entire oil produced at Cairn India’s Rajasthan oil fields.
The company seeks assured oil supply for at least 10 years for it to begin work on the refinery project. Cairn produces about 175,000 barrels a day or 8.75 million tonne a year of crude oil from its Mangala and other fields in the Rajasthan block. Going forward, the firm is projecting an output of 300,000 bpd (15 million tonne).
But the approved plateau is only 175,000 bpd and there is no certified data available to state that this level will last for the next 15 years (five years for refinery construction and 10 years allocation as requested by (HPCL).
According to some officials from HPCL, an inland refinery is not feasible unless it has a definite source of crude oil for initial 10 years of operations. Without a crude source, it does not make any sense to build an inland unit and the company would rather look at a coastal option where crude oil can be imported from abroad.
For an inland refinery, crude oil will have to be first imported at a port on the west coast, probably in Gujarat, and then transported to hinterland through an expensive pipeline.
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