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IOC, BPCL, HPCL sign agreement to set up USD 40 bn refinery

Press Trust of India  |  New Delhi 

State-owned firms IOC, and today signed an agreement to jointly set up the world's largest refinery and petrochemical complex at Ratnagiri district of at a cost of USD 40 billion.

Corp (IOC) will be the lead partner with 50 per cent stake while Hindustan Petroleum Corp Ltd (HPCL) and Petroleum Corp Ltd (BPCL) will take 25 per cent stake each, Chairman Sanjiv Singh said.


The three refining and marketing companies signed the joint venture agreement here this evening.

Speaking on the occasion, Minister Dharmendra Pradhan said though is the world's third largest energy consumer after US and China, its per capita energy consumption is one-fourth of the world average.

"Domestic demand is likely to climb to 500 million tonnes by 2040. Against this, our domestic refining capacity currently is 230-235 million tonnes. We need to plan capacity addition to not just meet this demand but also of export market," he said.

Already, 55 million tonnes of brownfield refinery expansion has been finalised at existing refineries and a new 9 million tonnes unit is planned at Barmer in Rajasthan, he said.

He said the 60 million tonnes capacity refinery at Babulwadi, Taluka Rajapur in Ratnagiri district is being set up keeping in mind the future fuel demand and the export potential of the country.

The refinery will have an accompanying mega petrochemical plant, Singh said adding the petrochemical plant would include an aromatic complex, naphtha cracker and polymer complex.

The project will take five-six years after land acquisition and all clearances, he added.

The entire refinery will include three crude units of 20 million tonnes each.

has been looking at West coast for a refinery as catering to customers in West and South was difficult with its refineries mostly in the North.

and have also been looking at a bigger refinery because of constraints they face at their Mumbai units.

The refinery will produce petrol, diesel, LPG, ATF and feedstock for making petrochemical that are basic building blocks in plastic, chemical and textile industries.

Fifteen million tonnes a year is the biggest refinery any public sector unit has set up in one stage. recently started its 15 million tonnes unit at Paradip in Odisha.

Reliance Industries holds the distinction of building the biggest refinery in till now.

It built its first refinery at Jamnagar in Gujarat with a capacity of 27 million tonnes, which was subsequently expanded to 33 million tonnes. It has built another unit adjacent to it for exports, with a capacity of 29 million tonnes.

Being on the West coast will provide the unit a natural advantage of easily sourcing from the Middle-East, Africa and South America, officials said, adding East coast was not being considered as shipping there will add at least USD 1 per barrel to cost.

Also, moving products to consumption heartland from west will not be difficult.

has a refining capacity of 232.066 million tonnes, which exceeded the demand of 194.2 million tonnes in 2016-17 fiscal.

According to the International Energy Agency (EA), this demand is expected to reach 458 million tonnes by 2040.

has 11 refineries with a total capacity of 81.2 million tonnes while has four refineries with a total capacity of 33.4 million tonnes. has three refineries with a total capacity of 24.8 million tonnes.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, June 14 2017. 21:32 IST
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