HPCL hunts for allies for capacity expansion

State-owned Hindustan Petroleum Corporation Limited (HPCL) is looking for strategic partners for investments, crude oil procurement and product marketing as part of its proposed expansion plans at the Visakha refinery.

HPCL has decided to expand the capacity of its Viskha refinery by 9 million tonne.

Engineers India Limited in its draft report of the feasibility study submitted to HPCL for the proposed expansion estimated that the project cost would be around Rs 9,000 crore, RMN Marar, general manager (projects), HPCL, told Business Standard.

Currently, the Visakha refinery crude refining capacity is 7.5 million tonne per annum. To upgrade the products quality to Euro-3 and Euro-4 norms, the corporation has taken up `clean fuel project¿ at an investment of about Rs 2,200 crore.

The project is expected to be ready by May-June 2007. After completion of the project, the refinery capacity will increase to 8.3 million tonne, Marar said.

After adding 9 million tonne capacity to the refinery, HPCL would dismantle one of its old plants, which had a capacity of 1.5 million tonne, he said adding that then the effective plant refining capacity of the refinery became about 15 million tonne per annum.

As part of the expansion plans, HPCL requires an additional land of about 400 acres for construction of crude oil storage terminal near the existing refinery. In this regard, HPCL has approached the Vizag port, which has in principal agreed to allot land on a long lease basis.

In order to meet the huge financial requirement for carrying out expansion, and marketing its products in the domestic and international markets, HPCL is examining the possibility of finding strategic equity partners.