State-run Hindustan Petroleum Corp plans to invest Rs 25,000 crore to set up a refinery with an annual capacity of 15 million tonnes a year on the west coast.
The new refinery may be located anywhere between Mumbai and Goa on the western coast and is being mulled to make up for the space constraint the Mumbai refinery faces.
“We face tremendous space constraint at our 6.5 million-tonne-a-year Mumbai refinery. A refinery of this size should be spread over 2,000 acres of land, but our refinery is spaced in just 350 acres,” a company official said.
HPCL, which has a 7.5-million-tonne-a-year unit at Vizag in Andhra Pradesh and is building a 9-million-tonne plant in Punjab in a joint venture with steel czar Lakshmi Mittal, is contemplating a refinery of the size of 10-20 million tonnes a year.
“We are commissioning a feasibility study which should be completed in six months. An investment decision will be made based on the feasibility study,” the official said. The planned refinery would be like an extension of the existing Mumbai unit. “We have informed the Maharashtra government for the required 2,500-3,000 acres of land for the project,” the official said.
When contacted, HPCL Chairman Arun Balakrishnan confirmed that the company was studying possibility of a new refinery on the west coast but refused to elaborate.
The official said the refinery may be located in Raigad or Ratnagiri districts of Maharashtra. If land will not be not available, the company may think of going to Gujarat. The project may be funded in a debt-equity ratio of 2:1 or 2.5:1, the official said, adding the refinery would mostly meet domestic demand.
The new refinery project comes on the heels of HPCL being forced to put on back-burner a $10 billion refinery-cum-petrochemical project at Vizag after Mittal and French oil major Total SA pulled out.
The only-for-exports 14-million-tonne-a-year refinery was being planned to target South East Asia and the Middle East.
Besides HPCL, Mittal and Total, the project also has explorer Oil India Ltd and gas utility GAIL India as partner.
