Nagarjuna Oil's Rs 22,000 cr refinery to start phase-I in mid 2014

Project was delayed for 18 months due to damaged caused by a cyclone

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Nagarjuna Oil Corporation Limited's Rs 22,000 crore petroleum refinery project is expected to commence its first phase of operations in 2014. The Project, which was to start operations 18 months earlier, go delayed due to cyclone-related damages.

Hyderabad-based Nagarjuna Group has partnered with the Tamil Nadu Government and Tata Petrodyne Ltd to implement the refinery project. Last year, Singapore-based Trafigura Pvt Ltd picked up a 24 per cent stake for around Rs 650 crore in Nagarjuna Oil Corporation Limited (NOCL) and another Rs 600 crore was infused by Trafigura into the construction of storage facilities and associated infrastructure through another entity Portoil Ltd, an 80:20 joint venture between Trafigura and NOCL. This will come up on a 100 acre site near the refinery’s 2,500 acre facility.

According to the P Thangamani, Minister for Industries, Tamil Nadu Government, the proposed capacity of this petroleum refinery will be 12 million tonnes a year. The total investment in this project is estimated to be about Rs 22,000 crore. This is one of the Tamil Nadu's largest private sector project.

In the first phase, the implementation of six million tonnes a year capacity unit will be completed and operations are expected to commence by 2014, said the Minister, while placing the Department's Policy Note in the State Assembly.

The project will make Tamil Nadu self-sufficient in petroleum fuels. The refinery includes a captive port and a power plant. The refinery is designed to cater to the domestic needs of the state, 70 per cent of the total production is for the state marketing and the rest is for exporting,of the combined output of select petroleum products, namely High Speed Diesel, naphtha and Aviation Turbine Fuel.

According to company officials, the commencement of the project was delayed by 18 months due to damage to tanks and port structure from the cyclone Thane, which hit the coastal districts of Tamil Nadu.

The project was planned in July 2001 but work started in 2006 after getting all the clearance. Government of India has declared Nagarjuna's Cuddalore project as the anchor unit for its Petroleum, Chemicals and Petrochemicals Investment Region in the Cuddalore-Nagapattinam region.

Located, 180 km south of Chennai on the Bay of Bengal, this project will refine 6 million metric tonnes of crude petroleum per year (MMTPA) in Phase-I, which is around 125,000 BPSD, and will primarily meet the growing energy needs of southern India. The project site is spread over an area of 2100 acres.

The refinery is designed for producing feedstock of EURO III and EURO IV standards.