Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corp (HPCL) signed a $30 billion pact to build India’s biggest oil refinery in Maharastra, on the side-lines of the Petrotech Conference at New Delhi. The 60-million tonne per year deal of the refinery will see IOC holding a 50 per cent stake in the project while BPCL and HPCL will have 25 per cent each, thereby making IOC leader of the consortium.
The project will be executed in two phases. The foremost step is to find 12,000-15,000 acres of land to build a mega complex on the coast of Maharashtra.It will have 40 mt capacity with an aromatic complex, naphtha cracker unit and a polymer complex. It will cost around Rs 1.5 lakh crore and come up in 5-6 years since the date of land acquisition. The second phase comprises of a 20 mt refinery, costing Rs 50,000-60,000 crore.
A host of products including petrol, diesel, LPG, ATF and feedstock for petrochemical plants in plastic, chemical and textile industries would be produced at the mega refinery. Strategically, IOC has been looking for a refinery on west coast to cater to its requirements in West and South (serving customers based in West and South from its refineries in North has been tough). Additionally, HPCL and BPCL also have been scouting options for a bigger refinery from their existing Mumbai units.
Dharmendra Pradhan, the Oil Minister said that oil majors like Saudi Aramco of Saudi Arabia are interested in taking a stake in the project, but nothing has been finalised as yet.
This pact is a big feather on the public sector venture as IOC’s 15 mt unit at Paradip, Odisha is its biggest refinery currently. In contrast, private player Reliance Industries has the biggest refinery in India, now with its 33 mt Jamnagar refinery. It has also built an adjacent unit of 29 mt capacity for exports.
India has an exceeding refining capacity of 232.06 mt against a demand of 183.5 mt in 2015-16. However, according to the International Energy Agency, this demand is expected to nearly double to 458 mt by 2040.
IMAGE SOURCE: Representation Image