HPCL's mega Rajasthan refinery likely to be on Cabinet agenda this week

Project is expected to bring in an overall investment of Rs 60,000-70,000 crore in the entire area, says Ashok Singh Gehlot

The Rs 37,230-crore refinery-cum-petrochemical project proposal by Hindustan Petroleum Corporation Ltd (HPCL) in Rajasthan, the largest investment item the state would see till date, is set to go for Cabinet clearance next week.

The state government had recently decided to shift the site to Pachpadra, about 40 km away from the initially-planned location at Leelala village, both in Barmer district.

“The proposal would be going before the Public Investment Board on Monday and the petroleum ministry has already moved a note to take it up before the Cabinet Committee on Economic Affairs, too,” said a senior ministry official.

The location was shifted after farmers in Leelala sought higher prices. These had shot up from Rs 20,000 a bigha after  the project was announced to Rs 40-60 lakh.

The decision to shift had created a furore in state politics, with local leader and revenue minister Hemaram Choudhary resigning due to this.

According to Rajasthan chief minister Ashok Gehlot, the project is expected to bring overall investment of Rs 60,000-70,000 crore in the entire area. It is expected to be commissioned by the end of 2017. The refinery will process the locally available crude, as well as other varieties.

The refinery-cum-petrochemical complex is designed to produce motor fuels with the latest environmental specifications and a wide range of petrochemicals.

About half the crude oil for the plant would come from the Barmer basin and the rest would be imported.

The state government has 26 per cent stake in the project, to give upfront assurance to the promoter. It has also promised to extend support at $1 a barrel on purchase of crude oil by the Rajasthan refinery.

The refinery might also get 50 per cent excise duty exemption for five years. The government has also offered an interest-free loan from 2016-17 to 2030-31, to be repaid in annual instalments from 2031-32.  

HPCL has approached the environment ministry for the necessary clearances at Pachpadra.

It is also in talks with various entities to partner the project. Engineers India Ltd had proposed to the state government that it would take five per cent equity.

THE MAMMOTH

* Rs 37,000-cr project Largest investment the state has seen till date

* Rs 60,000-70,000 cr Expected overall investment of due to the refinery

* 2017 Date of expected commissioning

* 26% Stake with state government

* 50% Excise duty exemption likely for five years