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Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) are set to form a company, Western India Refineries and Petrochemicals, in a month to execute a $40-billion refinery project in Maharashtra. “We are in the process of registering the company. We have applied with the Registrar of Companies. It may be in place within a month,” an executive with one of the oil marketing companies told Business Standard.
The three companies had in June signed a joint venture agreement for setting up a 60 million tonne refinery-cum-petrochemicals complex at Babulwadi, a village in Maharashtra’s Ratnagiri district. The refinery, expected to be commissioned by 2022, will have flexibility to process a wide spectrum of light and heavy crude oil grades and will be designed for Euro VI and grades of transportation fuel above that.
According to the memorandum of understanding among the companies, IOC will have a 50 per cent stake in the refinery complex, and HPCL and BPCL will hold 25 per cent each.
“About 15,000 acres of land are required and Maharashtra Industrial Development Corporation will spearhead the acquisition process,” the executive added. The main complex on 14,000 acres will be at Babulwadi and another 1,000 acre storage and port facility will come up 15 km away on the coast. Apart from land acquisition, environment and safety clearances pose hurdles because Babulwadi is 15 km away from 10,000 Mw Jaitapur nuclear power project that is facing protests by locals.
The largest public sector refinery in India is IOC’s 15 million tonne Paradip refinery in Odisha. The world’s largest single location refinery of 33 million tonnes is run by the Mukesh Ambani-led Reliance Industries at Jamnagar in Gujarat. Reliance Industries has another 27 million tonne capacity in the Jamnagar special economic zone. India has refining capacity of 232 million tonnes, about 38 million tonnes more than the country’s demand of 194.2 million tonnes in 2016-17.
Petroleum Minister Dharmendra Pradhan had suggested the setting up of a mega refinery in 2015 because India’s fuel demand is likely to touch 458 million tonnes by 2040, according to estimates by the International Energy Agency.