Trial run of Bathinda oil refinery from Feb

The trial run of the 9 million tonne Bathinda oil refinery, being developed by HPCL-Mittal Energy (HMEL), would start in February and commercial production is likely to commence in May next year.

"We are eyeing to start trial run of oil refinery in Bathinda on February 15 next year. After the successful trial run, we expect the refinery will go on stream for commercial production in the month of May (next year)," company sources said here.

The work on oil refinery began on November 14, 2007.

About 92 per cent of work on Rs 18,919-crore oil refinery has been completed and a sum of over Rs 14,000 crore has been spent on this project so far, sources said.

After commissioning, the refinery would produce high value petroleum products such as LPG, naphtha, petrol, diesel, aviation fuel, pet coke etc.

As per the break up, the capacity of major products like diesel will be 3.7 million tonne, followed by petrol at 1 million tonne, LPG at 0.7 million tonne and coke at 0.9 million tonne in the upcoming refinery.

To carry crude oil imported from Iran, Iraq etc, a 1.014 km long pipeline is laid between Gujarat’s Mundra port and Bathinda at an estimated outlay of Rs 5,000 crore.

"This pipeline will have carriage capacity of 18 million tonne per annum, double from present capacity," they said. "A singly mooring point, which is 17 km from Mundra port has been set up from where the crude oil will be kept at crude oil terminal established at the port," sources said.

After the setting up the refinery, Punjab will also see creation of Polypropylene based downstream industry in the state involving a capital investment of Rs 1,100 crore having employment opportunities for 9,000 people.

Bathinda refinery will be one of the few refineries in the country, which will have the capacity to produce 4.40 lakh metric Tonne of polypropylene, they said. While adding that currently, polypropylene granules are produced in Gujarat and Maharashtra.

With Ludhiana, Bathinda, Banur and Lalru being seen as most attractive locations for the setting up of polypropylene based industry, about 50 per cent of the total produce would be consumed by the state itself, sources said.

Polypropylene granules are mainly used by plastic industry such as woven sack and film units as main raw material in manufacturing of plastic items like buckets, mugs, toys, plastic furniture, wrapping films, woven sack bags for cement and food grains.

The issue of granting additional fiscal incentives sought by HMEL from Punjab government has still remained unresolved.

HMEL has been seeking Rs 400 crore per annum as interest free loan for the first 15 years from 2011-12 to 2025-26 which is to be paid back per annum from 16th year-2026-27 onwards for the next 15 years.

HMEL is a joint venture between Hindustan Petroleum Corporation (HPCL) and Mittal Energy Investment, Singapore - an ArcelorMitta company. The JV partners hold a stake of 49 per cent each in the company, the rest 2 per cent is held by financial institutions.

Steel magnate LN Mittal had drawn attention of Prime Minister Manmohan Singh towards this issue and had urged him to ask Punjab government to grant fiscal incentives.