Nagarjuna to commission Cuddalore refinery next year

Nagarjuna Oil Corp (NOC) today said it will commission its Rs 6,960 crore Cuddalore refinery in Tamil Nadu by the end of 2011.

"The refinery is 40 per cent complete and we are targeting commissioning by end 2011," NOC Managing Director S Rammohan said on the sidelines of the Petrotech-2010 oil and gas conference here.

The 6 million tons a year unit will start processing crude oil in December 2011 and achieve full commissioning by March 2012, he said.

NOC has tied-up with British energy major BP Plc for sourcing crude oil that will be processed at the refinery. BP will also be responsible for export of 25 per cent of fuel produced at the unit, he said.

"The remaining product will be sold domestically. We have signed with Indian Oil Corp (IOC) for selling 4 million tons of products to meet demand in that region," he said.

Refinery, located 200-km south of Chennai on the east coast, will have associated marine infrastructure including single point mooring (for crude oil handling in very large crude carriers) and jetty (for finished product handling). It will have high complexity factor designed to take advantage of processing heavy and sour crude oil.

Work at the refinery site commenced in 2006, and will produce Euro IV and Euro V auto fuels, LPG and bitumen. The project site is spread over 1600 acres, which includes 300 acres of greenbelt.

Nagarjuna Fertilizer holds 51 per cent stake in the project while Tata Petrodyne, a unit of Tata Group, has 30 per cent. Tamil Nadu government holds 5 per cent through TIDCO, Uhde of Germany has 4 per cent and Cuddalore Port has the remaining 10 per cent.

Rammohan said NOC plans to expand the refinery to 15 million tons a year at a cost of Rs 11,000-12,000 crore. "Studies for the expansion will begin after the refinery is commissioned."

Also, an initial public offer (IPO) of NOC may happen some time in second half of 2012. "Nagarjuna Fertilizer will sell a part of its holding in the IPO," he said.