The state-run Indian Oil Corporation (IOC) and its subsidiary, the Chennai Petroleum Corporation (CPCL), have started working on the Rs 31,580 crore refinery project at Nagapattinam in Tamil Nadu.

While both the companies will hold 25 percent each in the proposed nine million tpa refinery, the remaining 50 percent will be held by a strategic or financial partner, for which talks are already on.

The companies have appointed SBI Capital Markets, a subsidiary of the State Bank of India, for providing the financial advisory, debt and quasi equity syndication services for the greenfield project.

SBI Caps is being engaged to assist in the identification of seed investors and also investing in equity or quasi-equity to the extent of Rs 5,000 crore, and also for arranging debt to the tune of Rs 20,000 crore for this project.

The financial closure of the project is expected to be achieved within six months. The project is expected to be completed between 45-50 months once work starts.

CPCL has also roped in consultants like Engineers India (EIL), McDermott and Tata Consulting Engineers (TCE) for the project and has also reportedly signed contracts worth around Rs 1,500 crore.

The project is expected to supply motor spirit and high speed diesel to the hinterlands of Tamil Nadu and adjoining areas and also has export potential with a mix of petrochemical products like polypropylene.