Babulwadi to house world's largest oil refinery

It'll be set up at 2 locations in Ratnagiri with main complex having area of 14k acres in Babulwadi

Babulwadi, a small village located in the Rajapur Taluk of Maharashtra's Ratnagiri district, is set to host the world's largest refinery and petrochemicals complex, which might see an investment of Rs 1.5 lakh crore. 

The refinery will be set up at two locations in Ratnagiri, with the 14,000-acre main complex at Babulwadi and another 1,000-acre storage and port facilities about 15 kilometre away from the main location in the coastal area. According to sources close to the development, the project management consultant Engineers India Ltd has already started its initial studies in the area for setting up the refinery. 

The world's largest single location refinery of 33 million tonnes (MT) is currently run by the Mukesh Ambani-led Reliance Industries (RIL) at Jamnagar, in Gujarat. RIL also has another 27 MT refinery situated in the Jamnagar special economic zone. The largest public sector refinery in India, currently, is IndianOil's 15 MT Paradip refinery in Odisha. 

The public sector's total refining capacity in India comes to around 150 MT, while the private sector contributes the remaining 80 MT.

While Indian Oil Corporation Ltd (IOC) will hold the majority stake of 50 per cent in the 60 MT project, Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd will hold 25 per cent each. "We also have the option to bring in a strategic investor at a later stage. Even then, IOC will continue to maintain majority holding in the refinery," the official added. 

Babulwadi was selected out of the 10 locations that the Maharashtra government had shortlisted. According to the 2011 census, the village has a population of 564, of which 257 are males and 307 are females.   

"We are open for strategic partnership for the project. It is a very large project and we definitely feel that this is the right time for people to look at India to come with investments. While on the one hand, the three public sector firms that are planning the project are quite capable of setting up the project on their own, but we would certainly welcome the entry of a new player,” said B Ashok, chairman for IOC, told Business Standard in a recent interview.

 

The Minister of Petroleum and Natural Gas, Dharmendra Pradhan, was in talks with countries like Saudi Arabia and Kuwait, to broach the possibility of them having a strategic stake in the refinery. India, currently, has an overall refinery capacity of 230 MT, out of which 80 MT is owned by IndianOil and the private sector owns another 80 MT. The idea of a joint refinery was mooted by Pradhan in December 2015 and about 40 MT of the capacity will come in the first phase, while the remaining 20 MT will be in the second phase.  

The three state-run oil majors had signed a memorandum of understanding for setting up the refinery on December 2016, on the sidelines of India's flagship hydrocarbon event, Petrotech 2016. According to the initial plans, crude oil for the refinery will be sourced from West Asia.