Andhra allots 6,000 acres to BPCL for ₹96,000 cr refinery near port

The state government also announced in-principle approval of total financial incentives to BPCL, up to 75 per cent of the capital expenditure over a period of 20 years from the commencement of project

Andhra Pradesh has approved the allotment of 6,000 acres of land to state-run Bharat Petroleum Corporation Ltd (BPCL) for setting up a greenfield refinery and petrochemical project near Ramayapatnam port in Nellore district, on a cost basis.

 

The state also announced in-principle approval of total financial incentives to BPCL, up to 75 per cent of the capital expenditure over a period of 20 years from the commencement of the project, according to a government order dated October 7.

 

Andhra Pradesh will provide a capital subsidy of 43.5 per cent in 15 instalments, 100 per cent Goods and Services Tax refund for operational phase, refund of state GST (including ineligible) and state share in integrated GST/central GST during construction, reimbursement of Cross Subsidy Surcharge (CSS) charges collected by the state, and 100 per cent waiver on stamp duty and registration fees.

 

 

BPCL has estimated a project cost of over Rs 96,000 crore for the project and proposed the refinery’s operational capacity at 9-12 million metric tons per annum (mmtpa).

 

Of the total investment, BPCL will spend Rs 4,843 crore in FY26, followed by investments of Rs 9,686 crore in FY27, Rs 14,529 crore in FY28, Rs 29,059 crore in FY29 and Rs 38,745 crore in FY30.

 

BPCL will use the land to operate refinery and petrochemical units spread over an area of 2,333 acres, administration maintenance and product tanks over 1,085 acres, green hydrogen/renewables over 1,000 acres, and crude oil terminal over 800 acres.

 

The state government said BPCL has been asked to start commercial operations at the project by January 2029. The oil-marketing company is setting up the refinery to meet domestic fuel demand and exports.

 

BPCL expects to complete a detailed feasibility report on Andhra refinery by December 2025, Vetsa Ramakrishna Gupta, director of finance at the company, told Business Standard.

 

The company will begin final negotiations for collaboration with foreign players for the refinery-cum-petrochemical project, said Gupta.