ONGC puts on hold Barmer refinery project

New Delhi, Sep 19 (UNI) ONGC Chairman and Managing Director R S Sharma today confirmed that the upstream oil giant has shelved it plans to build a Rs 8,000 crore refinery at Barmer, Rajasthan, that was to process 150,000 barrels per day of crude oil from its partner Cairn Energy's oil fields in Rajasthan.

The plant is not viable, Mr Sharma said after the AGM of the ONGC.

Instead the crude oil may be sold to Reliance Industries or Essar Oil.

''Building a refinery in a landlocked state is uneconomical. With IOC's Mathura and the expanded Panipat refinery in the region and HPCL building a nine million tonne per annum refinery at Bhatinda by 2010, there will be no market for the planned refinery at Barmer,'' an ONGC official said.

ONGC plans to get its subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL), denominated as the official offtaker of crude oil found by Cairn Energy in Rajasthan and instead sell it to refiners.

''We would like to sell the crude oil to public sector refineries first. But due to the waxy nature of the Rajasthan crude, its best value can be realised only at the Jamnagar refinery (of Reliance) or the upcoming Vadinar refinery (of Essar Oil)," the ONGC official said.

ONGC-Cairn, 30:70 owners of the Rajasthan oilfields, would build a crude oil transportation pipeline from Barmer to Jamnagar and bear the cost in the field development, the official said.

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