"The pre-feasibility study is on. before the end of the year we will know if we will move ahead with the project," Total Asia-Pacific Senior Vice-President Thierry Pflimlim said today.
The five companies had signed an agreement in October last year to setting up a 15 million tonne refinery and 1 million tonne petrochemical complex. The capacity of the refinery has now been reduced to 14 million tonne "to make it more feasible".
The project is expected to be completed 4-5 years from the start of construction.
HPCL already operates a 7.5 million tonne refinery in Visakhapatnam. The company is also planning to expand this refinery to 15 million tonne. The company is also setting up a 9 million tonne refinery at Bathinda in Punjab along with LN Mittal's Mittal Investments, which owns 49 per cent in the refinery.
Pflimlin said the pre-feasibility study will take into account the absence of income tax holidays. Finance Minister P Chidambaram had said earlier this year that refineries which begin operations after March 31, 20012 will not be eligible for the seven-year income tax holiday.
The proposed refinery and petrochemical plant will export most of the oil products it produces. "There is a good market for petroleum products in the South East Asia. This makes an export-oriented refinery in India's east coast feasible," said a Mumbai-based analyst.
Oil and Natural Gas Corporation (ONGC), last month sold its stake in the proposed 15 million tonne Kakinada refinery to the Bangalore-based GMR group. At the time of exiting ONGC had said that the project was not economically feasible, and the refinery was not their core business. Kakinada is located around 150 kms away from Visakhapatnam along Andhra Pradesh's coastline.
