Hindustan Petroleum Corp. Ltd. (HPCL) and the state government of Rajasthan have partnered to jointly develop HPCL’s previously announced plan to set up a refinery and petrochemical complex in Barmer district, Rajasthan.
Officials from HPCL and Rajasthan’s state government signed an agreement on Aug. 17 to form HPCL Rajasthan Refinery Ltd. (HRRL), a new joint venture company that will build and own the proposed project, according to a release from the office of Vasundhara Raje, Rajasthan’s chief minister.
Signing of the agreement follows the Indian federal government’s official approval of the 431.29 billion-rupee project on Aug. 16, Raje’s office said.
The new JV comes as part of HPCL’s revival of an earlier plan to build the 9 million-tonne/year integrated complex in Barmer, for which the parties signed a revised memorandum of understanding (MOU) in April (OGJ Online, Apr. 18, 2017; July 18, 2014; Mar. 14, 2013).
While HPCL still will hold a 74% interest and the state government 26% in the HRRL JV as outlined under the original project, the renegotiated deal will cut Rajasthan state’s total cost burden by about 400 billion rupees as well as increase its return on investment (ROI) to 12% vs. an earlier 2% ROI, according to the chief minister.
Scheduled to begin construction immediately following approval and clearance from India’s Ministry of Environment, Forest, and Climate Change, the refinery will take about 4 years to complete for a targeted startup sometime in 2021-22.
The complex, which will use crude produced locally and from elsewhere to produce Bharat Stage 6-grade (equivalent to Euro 6-quality) fuels, will be Rajasthan’s first refinery as well as India’s first petrochemical plant designed to process indigenous crude.
At the Apr. 18 signing of the revised MOU for the project, India’s Minister of Petroleum and Natural Gas Shri Dharmendra Pradhan said Cairn India Ltd. will invest another 270 billion rupees during the next 4 years to increase oil production from its Barmer Block fields to help feed the refinery.
The tender process for the boundary wall of the 4,813-acre area on which the proposed refining complex will be built already is under way, according to Raje’s office.
Contact Robert Brelsford at [email protected].