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Hindustan Petroleum Corporation (HPCL)'s 9 million tpa refinery-cum-petrochemical complex project in Barmer district of Rajasthan is getting closer to reality as the Union Cabinet is set to approve the project before September 2013.
HPCL recently finalised the Pachpadra region in Barmer district as the location for the refinery. The finalisation of the location was a major step for the Rs 37,320 crore project which was first envisaged by HPCL in 2005.
The decision of HPCL to change the location from the originally selected Lilala region to Pachpadra has not gone well with the people of Lilala. The refinery was to benefit the people in Barmar district. However, shifting of the project to Pachpadra will now benefit the people of Jodhpur district.
HPCL, on its part, has made its stance clear by stating that Pachpadra was chosen as the site is technically superior to Lilala, for the project. The company has also stated that shifting the oil refinery-cum-petrochemical complex back to its originally proposed site at Lilala would further delay the project and each day of delay will cost at least Rs.10 crore.
The Rajasthan government has been pursuing the central government to have a refinery in the state after Cairn India discovered the country's biggest on-land oilfield in Rajasthan in 2004. The Barmer refinery will not only be the first oil refinery project in Rajasthan but also the second biggest project in the state after the Indira Gandhi canal project.
HPCL now requires the Union Cabinet's nod to implement the refinery project, which is scheduled to be set up in four years.
HPCL targets 50 mtpa by 2020
HPCL currently operates two refineries; one in Mumbai with a capacity of 6.5 million tpa, and another in Visakhapatnam with a capacity of 8.3 milion tpa. Additionally, HPCL is also operating a 9 million tpa refinery at Bathinda, Punjab, jointly, with Mittal Energy Investments. Thus, currently, HPCL has a total refining capacity of 24 million tpa.
As an expansion strategy, HPCL has set a target to reach 42 million tpa of refining capacity by 2016-17 and 50 million tpa by 2020. However, HPCL has to cross a number of hurdles before it can hit its targets.
HPCL's Visakhapatnam refinery expansion plan is still awaiting environment clearance. Similarly, its grand plan to set up a 15 million tpa refinery at Ratnagiri in Maharashtra has not made much progress. There is little scope for expansion of its Mumbai refinery though it intends to expand the capacity to 10 million tpa.
HPCL has appealed to the Andhra Pradesh government to allot land for its proposed 15 million tpa refinery-cum-petrochemical complex. GAIL is expected to partner with HPCL in setting up the mega project, expected to cost around Rs 32,000 crore.
Given the above developments, HPCL currently can only bank on its proposed Barmer refinery to get commissioned in the 12th Plan period.
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