HPCL considering new location for Rajasthan refinery

State-run Hindustan Petroleum Corporation Limited (HPCL) has said it might set up the proposed Rs 37,229-crore greenfield refinery-cum-petrochemical complex at Barmer in Rajasthan, not in Lilala, as planned earlier.

"We were facing some land-related issues. Now, the local government has come out with an alternative location nearby. We are looking into the suggestion," said K V Rao, director (finance), HPCL. The Rajasthan government would have 26 per cent stake in the project, according to the memorandum of understanding signed between both the parties.

According to a senior HPCL executive, the new project site would be more than 40 km away from Lilala at Pachparda. Earlier, farmers in Lilala had raised concern regarding compensation for the land. Also, the Ministry of Environment and Forests had recently asked the company to conduct a public hearing for the coming nine-million-tonne project and to bring out an environmental impact assessment (EIA) report soon. More than 3,700 acres are required for the proposed project.

HPCL accounts for about 20 per cent share of the petroleum products market. It also accounts for about 10 per cent of the nation's refining capacity, with two coastal refineries - one in Mumbai (with a capacity of 6.5 million tonnes per annum, or mtpa) and the other in Vishakapatnam (capacity of 8.3 mtpa). HPCL also holds equity stake of 16.95 per cent in Mangalore Refinery & Petrochemicals Limited (MRPL), a state-of-the-art refinery at Mangalore (capacity of nine mtpa), and 49 per cent stake in the nine-million-tonne Guru Gobind Singh Refinery in Bhatinda, Punjab.

Earlier, Petroleum Minister M Veerappa Moily had said the company's Rajasthan project would take at least four years to go on-stream. With a change location being changed, this is likely to be delayed further. The planned complex would be the first refinery specifically designed to produce petrochemicals from indigenous crude oil.

Initially, Oil and Natural Gas Corporation (ONGC), which has a stake in Cairn India's Barmer oil block, had come up with the plan to build a refinery in the region. Later, however, the project was taken forward by HPCL.

Pachparda is more than 15 km away from Cairn India's production site. Recently, Cairn India had struck fresh oil findings at its Rajasthan block. It had commenced the drilling of its first exploration well---Raageshwari-South-1---in February.