Bina refinery puts forth revised offer

Despite a cash crunch to start the Bina refinery in Agasod (Sagar district), Bhart Oman Refineries Limited (Borl), jointly promoted by Bharat Petroleum Corporation (BPCL) and Oman Oil Company Ltd, has roped in Engineers India Ltd for a sum of Rs 245 crore for project-management consultancy services.

The revised offer will now be implemented on a conventional basis instead of the lump-sum turnkey route, as proposed earlier.

So far BPCL has made no formal communication in this regard, even after signing an MoU for commercial tax deferment for a period of 15 years. Only the state government is upbeat on the project.

The estimated cost of the project may cross Rs 9,000 crore against the approved cost of Rs 6,354 crore. Further, the 6-million tonne proposed plant, if it takes shape, will have 9 million tonnes capacity, a source told Business Standard.

"Borl has revised the offer, and after negotiations with them a letter of intent was issued in December 2005 for the services of a total lump sum amount of Rs 245 crore. Borland EIL were in parleys to finalise the blue-print for the project, and for development activities, like site grading, construction of boundary walls etc.," they said.

The Borl board has also cleared the negotiation process to award redesign work of hydrocracker units and diesel hydrotreater units to Chevron Lummus Global, and naphtha hydrotreater and isomerisation unit to Des Plaines, a US -based firm, which is a leading international supplier and licensor of process technology, catalysts, adsorbents, process plants, and consulting services to the petroleum refining, petrochemical, and gas processing industries. A 60-room hostel is also proposed to accommodate staff at the Bina site.

As regards funding, BPCL has received an in-principal approval from some banks and is waiting for other banks too. BPCL has retained SBI Capital Markets for syndication of debt. But the lead banker is yet to be decided.

According to sources, the company has already received in-principal approval from 15 banks and financial institutions and is negotiating with nine more financing agencies. "The financial closure is expected by March this year," said sources.

The company is likely to finalise the selection process of licensors for the remaining units by March- April 2006. The work of re-varification survey of the Vadinar-Jhabua-Bina cross country crude pipeline route is also in progress.

It is expected to be completed by May this year, said sources.