HPCL to invest Rs13,000 cr to augment Vizag refinery capacity

NEW DELHI: State-owned Hindustan Petroleum Corp Ltd (HPCL) plans to invest Rs13,000 crore to almost double the capacity of its Vizag oil refinery in Andhra Pradesh to 15 million tonnes a year by 2013-14.

"We have asked for a detailed feasibility report (DFR) for raising capacity at the Vizag refinery," HPCL Chairman and managing director Subir Roychowdhary said here.

The decision to expand the Vizag refinery follows steel tycoon Lakshmi Mittal group and French oil firm Total SA walking out of a proposed USD 4 billion project to build a 15 million tonnes per annum refinery and a 2.5 million tonnes per annum petrochemicals plant near HPCL's 8.3 million tonnes per annum refinery at Visakhapatnam.

"That project is on freeze (since 2007 when Mittal walked out). We are now looking at raising our Vizag refinery capacity," he said.

The other partners in the five-way consortium were state-run explorer Oil India Ltd and state gas utility GAIL India Ltd.

HPCL does not intend to bring a partner onboard for the refinery expansion.

It may add a new 180,000 barrels per day (9 million tonnes per annum) crude distillation unit (CDU) and scrap the old 36,000 bpd (1.8 million tonnes per annum) unit at the Vizag refinery.

"We already have acquired land for the project," he said. "The project will take 3 years to complete."

HPCL currently operates three CDUs at the 8.3 million tonnes a year (166,000 bpd) Vizag refinery. It also runs a 6.5 million tonnes a year refinery in Mumbai.

Roychowdhary said HPCL and Mittal Energy, owned by billionaire Lakshmi Mittal, will mechanically complete the 9 million tonnes a year refinery at Bhatinda, in Punjab, by March, 2011, and the unit will be fully operational by September.

HPCL is also looking at investing Rs30,000 crore to set up an 18 million tonnes a year refinery.

The new refinery, to be set up in Maharashtra, was conceptualised to make up for space constraints at HPCL's existing Mumbai Refinery.

"We have been told that 1,800 acres of land is available with MIDC (Maharashtra Industrial Development Corp). We have asked for 1,000 acres more land," he said.

State-owned Engineers India has been engaged to carry out a feasibility study on the proposed refinery. The options under consideration are a single 18 million tonnes per annum unit or two units of 9 million tonnes per annum capacity each.

The DFR will be ready by December, Roychowdhary said. The land earmarked for the refinery is located between Ratnagiri and Raigad and the unit, called Maharashtra Refinery, would be completed within 48 months from the date of receipt of all approvals. MORE PTI ANZ ARV ARV 11151333 NNNN