"Bhatinda refinery financial closure by Feb 07"

Hindustan Petroleum Corporation (HPCL) is expected to tie-up the necessary funds for its 9 million metric tonne per annum (MMTPA) Bhatinda refinery by February 2007, and the unit will be commissioned by September 2010.

"The financial closure, for which SBI Caps has been appointed financial advisor, will be completed by February next year," M Lal, chairman and MD of HPCL, said.

Lal said the project will have a debt-equity ratio of 60:40. "The debt component will be a little more than Rs 8,000 crore," he said.

He also said the company would think about a public issue once the project is complete. "We will take a decision based on our financial requirements, but that will be done only after the refinery is completed," he added.

The refining complex, which includes a captive power plant, is estimated to cost Rs 13,800 crore. The crude oil receipt, storage and transfer facilities are estimated to cost Rs 3,450 crore and will be completed to coincide with the refinery completion.

The Bhatinda refinery has been configured for processing heavy and sour crude to take advantage of the price differential between light and sweet crude. The refinery will produce LPG, naptha, diesel, petrol, kerosene, jet fuel, polypropylene and coke. The refinery would cater to Punjab, Jammu and Kashmir, Himachal Pradesh, Delhi and parts of Haryana and Rajasthan.

The company is also augmenting the capacity of its Vizag refinery by 9 MMTPA at an expenditure of Rs 9,000-10,000 crore, he added.