Reliance to have world's largest refinery by 2008

Jamnagar, Mar 30: Riding on the global shortage of refineries, Reliance Petroleum Limited, a subsidiary of Reliance Industries Limited will set up by December 2008 here, the world's single largest refinery that can process any type of crude oil.

The project will be set up on a Special Economic Zone (SEZ) and will cater to the export needs only, Executive Director, Reliance Industries Limited, Hital R. Meswani said here At a capital outlay of Rs 27,000 crore the new refinery would come up in the adjacent Jamnagar refinery of Reliance Industries Limited (RIL) in Gujarat, which is the world's largest grassroots refinery with a production capacity of 6.6 lakh barrels per day (bpd).

With the commissioning of the facility in 2008, the combined production capacity of Reliance group would reach 1.25 million bpd, making it the world's largest refinery.

The debt-equity ratio of the SEZ refinery will be 60:40. Out of the 90 crore shares, 20 per cent would be offered to the public. RPL had already filed the draft red herring prospectus with SEBI for making an initial public offer (IPO) which would be made through the book-building route. ''We are expecting SEBI clearance anytime next month,'' sources said.

The decision to set up an export-oriented refinery came as India now boosts of export surplus in petroleum products, and to capture the market abroad as a shortage in refining capacity in the United States and Europe looms large, they said.

''RPL wants to capture this market,'' sources said.

The complexity index or the Newton's complexity index of the SEZ refinery would be high, as much as 11.3, resulting in higher profit margins since the new plant would be able to process all types of crude,'' sweet or sour'', sources said.

Reliance Industries is exporting petroleum products to 50 countries across the world. The existing refinery was also floated by Reliance Petroleum Limited, which was later merged with the main company RIL several years back.

RPL would be floated by RIL, which would hold 80 per cent stake in the company while RIL would provide support to RPL in the form of crude sourcing and risk management.

RPL has tied up debt financing arrangements with banks and financial institutions to provide syndicated term loan facility for approximately Rs 6750 crore. ''We are at historic crossroads,'' Mr Meswani added.

UNI

Related Stories