HPCL to invest Rs 2,600 cr in Mundra, Delhi pipeline

Hindustan Petroleum Corporation will invest Rs 2,600 crore to lay a product pipeline from Mundra in Gujarat to Delhi by the second half of 2007, a senior company official said on Wednesday.

The pipeline will initially have an annual capacity of 3.5 million tonne, which will later be raised to 5.5 million.

"We also plan to set up an import terminal at Mundra port," said the official at a conference on gas. The pipeline will be over 1,000 kilometres long.

The official said HPCL's gross refining margin was currently around $6 per barrel compared with $3-4 per barrel in January-March due to the spurt in global crude oil prices.

The official said, the state-owned refining-cum-marketing major planned a capital expenditure of Rs 3,000 crore in the current financial year to March.

"Investments will be made to increase capacity of Mumbai and Vizag refineries and in pipeline projects," the official added.

HPCL plans to raise capacity of the Mumbai refinery to 7.9 million tonne from the designed capacity of 5.5 million tonne. The refinery operated at 6.3 million tonne during the financial year ended March.

HPCL also plans to raise output at Vizag to 8.4 million tonne from 7.5 million tonne. It plans to later expand its capacity to 15 million tonne.

On the proposed 9-million-tonne refinery at Bhatinda, Punjab, the official said, HPCL would work alone on the project as of now, though it is open to roping in a foreign partner.

Earlier, BP Plc had pulled out of the Bhatinda refinery as it did not find the project attractive. Despite BP's pullout, HPCL will stick to the refinery's commissioning schedule of 2010.

At 13:13 IST, shares of HPCL traded at Rs 329.35 on the National Stock Exchange, up 1.7 per cent from Tuesday.