The Rajasthan Government signed a memorandum of understanding (MoU) with Hindustan Petroleum Corporation Ltd. (HPCL) on Thursday for setting up a refinery-cum-petrochemical complex in the Barmer region.
The 9-million tonne refinery, to come up in the Barmer-Sanchore basin, has been a long-pending demand of Rajasthan. The project is expected to be completed in four years.
At Rs.37,230 crore, it is being hailed as the single largest investment in the history of the State.
The MoU was signed at the Chief Minister’s office here in the presence of Union Petroleum and Natural Gas Minister M. Veerappa Moily, Rajasthan Chief Minister Ashok Gehlot and Union Minister of State for Petroleum Panabaka Lakshmi.
Rajasthan Petroleum Secretary Sudhansh Pant and Director (Refinery), HPCL, K. Murali, signed the MoU on behalf of the State Government and the HPCL, respectively.
“It is a historical day for Rajasthan. The refinery project will bring development and prosperity to the State,” Mr. Gehlot said.
The project will be set up as a joint venture between HPCL, Rajasthan State Refinery Limited and other equity partners with HPCL holding the majority stake and the State Government owning about 15-26 per cent.
About half of the crude oil processed at the refinery would come from Barmer’s Mangala, Bhagyam and Asihwariya oilfields operated by Cairn India, while the balance would be imported. Oil and Natural Gas Corporation (ONGC), which has a minority stake in the oilfields, had initially reported to have committed to set up the refinery.
At present, Cairn produces 175,000 barrels of oil per day (8.75 million tonnes a year) from these oilfields, with a potential to produce as much as 300,000 barrels per day (15 million tonnes).
Vedanta Resources, which had acquired Cairn India in 2011, is also reportedly keen on a small holding in the project.
Mr. Gehlot said Mr. Moily had directed the Chairman and MD of HPCL to work on the Mangalore Refinery model to provide skill training to the State’s youth.
HPCL Chairman and Managing Director S. Roy Choudhury said the refinery would process indigenous crude as well as Arab Mix.
Mr. Moily hoped the project would be completed by 2016-17, and would pave the way for setting up other ancillary industries, generating employment for the people of the State.
The proposed complex, said Mr. Moily, would be the first such one specifically designed to produce petrochemicals from indigenous crude oil.
Ms. Panabaka Lakshmi assured the Rajasthan Government and HPCL of all the necessary support from her ministry.
