IOC, CPCL start working on Rs 31,580-cr refinery project at Nagapattinam

State-run Indian Oil Corporation (IOC) and its subsidiary, Chennai Petroleum Corporation (CPCL), have started working on the Rs 31,580-crore refinery project at Nagapattinam in Tamil Nadu.

While both the companies will hold 25 per cent each in the proposed 9 million tonne per annum (MTPA) refinery, the remaining 50 per cent will be held by a strategic or financial partner, for which talks are already on. The companies have appointed SBI Capital Markets, a subsidiary of the State Bank of India, for providing the financial advisory, debt and quasi equity syndication services for the greenfield project.

SBI Caps is being engaged to assist in the identification of seed investors and also investing in equity or quasi- equity to the extent of Rs 5000 crore, and also for arranging debt to the tune of Rs 20,000 crore for this project, CPCL said. The financial closure of the project is expected to be achieved within six months. The project is expected to be completed between 45-50 months once work starts.

CPCL has also roped in consultants like Engineers India Ltd (EIL), McDermott and Tata Consulting Engineers (TCE) for the project and has also reportedly signed contracts worth around Rs 1,500 crore. This comes close on the heels of Tamil Nadu Chief Minister M K Stalin handing over the order for acquisition of land for the project on September 3.

“The active support of the government of Tamil Nadu has also been received by way of approval of the land acquisitions to the extent of about 658 acres and release of the requisite Government Gazette Notifications,” said a CPCL statement.

The project is expected to supply motor spirit and high speed diesel to the hinterlands of Tamil Nadu and adjoining areas and also has export potential with a mix of petrochemical products like polypropylene. “The funding activity coupled with project activities, will foster development of the district and the state as well. This project will definitely be a feather in the cap of Tamil Nadu and IOCL group,” the statement added.