State-owned Hindustan Petroleum Corporation (HPCL) plans to invest about Rs 13,000 crore to double the capacity of its Vizag oil refinery in Andhra Pradesh to 15 million tonne a year in 3-4 years time.
"We have commissioned a detailed feasibility report (DFR) for putting up a 9 million tonne a year unit at our Vizag refinery," a company official said here.
Vizag refinery currently has a capacity to process 8.3 million tonne per annum of crude oil.
But after the new Crude Distillation Unit (CDU) is commissioned, an old 1.8 million tonne a year capacity plant will be dismantled, leaving only 6.5 million tonnes of refining capacity at the existing unit. Together with 9 million tonnes of new plant, the refinery will have over 15 million tonnes of capacity.
"The new plant will take 3-4 years to build. We are in the process of getting environmental and land clearance for the project," he said.
HPCL also owns a 6.5 million tonne refinery in Mumbai.
At the same time, HPCL is talking to BP Plc and Total SA of France to revive a stalled $10 billion refinery-cum- petrochemicals project adjacent to the Vizag refinery.
An HPCL-led consortium, which included steel billionaire LN Mittal's group, Total of France, state-owned Oil India and GAIL, had in 2009 put the project on hold as petrochemical demand then was seen as too weak to justify the investment.
"Mittal too is back on table. They have tasted success with now mechanically complete [9 million tonne] Bhatinda refinery [in Punjab]. They will be willing to come on board of this project too," the official said.
While OIL and GAIL stayed with the project, Mittal had in November 2008 "put on hold" his investment in the project. In the following year, Total exited the project, forcing HPCL to freeze the project that involved setting up a 14-million tonne refinery and an 1 million tonne petrochemical plant at a cost of Rs 45,000 crore ($10 billion).
The official said public sector firms HPCL, OIL and GAIL would together hold the same amount of stake which private firms BP, Total and Mittal would get in the project.
HPCL in 2007-08 had planned the only-for-exports refinery to target demand in South East Asia and the Middle East.
The five-way alliance of HPCL, explorer OIL, gas utility GAIL India, Mittal Investment Sarl and Total had in October 2007 signed a memorandum of understanding to look at the feasibility of setting up the Vizag project.
Total did pre-feasibility study for the refinery project and demand studies, while GAIL was in charge of the study of the petrochemical unit.
The source said the exact equity structure and project finances would be decided only after detailed feasibility studies.
