HPCL head says to build Bhatinda refinery in 36 months

Hindustan Petroleum Corporation Ltd. plans to start construction of a 9 million tonne per annum capacity refinery in Bhatinda in Punjab, "very soon", its chairman M B Lal said Tuesday. The refinery is expected to cost around Rs 9,000 crore, he said.

"We are progressing positively on the refinery and we are sticking to Bhatinda," Lal said on the sidelines of the conference, Petrotech-2005.

Lal said HPCL is hopeful of getting tax concessions for the refinery from the Punjab state government.

"We are working out a formula which will be viable to both the state government and HPCL. The work on the refinery will start very soon, very shortly," he said. The work on refinery will be completed in 36 months from the start of construction, Lal said.

The capital expenditure for the Bhatinda refinery will be met through a combination of internal resources, equity and debt, the HPCL chief said. HPCL plans to spend Rs 11,000 crore in capital expenditure over the next five years, he said.

"For 2005-06 our capital expenditure will be Rs 2,000 crore against Rs 1,000 crore in the current year," Lal said. HPCL currently has two refineries in Mumbai and Visakhapatnam with a total refining capacity of 13 million tonne per annum.

On HPCL's crude oil imports for 2005-06 (April-March), Lal said it is likely to remain at the current year's level of 9.5-10 million tonne.

"Term crude will make up for 70 per cent of the imports and most of our contracts have been renewed for next year," he said.

The company buys most of its crude oil from Saudi Arabia, the United Arab Emirates and Iraq.