HPCL to set up Rs 13,800 crore refinery at Punjab

New Delhi, Nov 22 (UNI) Hindustan Petroleum Corporation Limited (HPCL) today said that it would set up a refinery at Bhatinda, Punjab at a cost of Rs 13,800 crores ( 3 billion dollars) that would process after construction by September 2010 both heavy and sour crude oil.

Speaking to reporters, HPCL Chairman M B Lal said the public sector company will arrange finances for the refinery by February.

It will borrow Rs 8,000 crore to part finance the project while the rest of the funding will come from the company's shareholding, Mr Lal said.

The company is also mulling an Initial Public Offering (IPO) for the Bhatinda refinery and is in talks with Oil India Ltd about selling a stake.

HPCL has appointed Engineers India Ltd as its consultant for the Bhatinda refinery.

HPCL will also set up a captive power plant within its Bhatinda refinery complex by September 2010.

HPCL's subsidiary Guru Gobind Singh Refinery Ltd (GGSRL), which is implementing a nine million metric tonnes per annum (MMTPA) grassroot refinery at Bhatinda, will also create a facility for the crude oil receipt, storage and transfer facilities at an estimated cost of Rs 3,450 crore.

The refinery is expected to handle 20,000 barrels per day.

The crude oil receipt, storage and transfer facilities namely Single Point Mooring (SPM), crude oil terminal (COT) at Mundra and the 1,011 km crude oil pipeline from Mundra to Bhatinda for supply of crude oil to the refinery will be implemented by HPCL, Mr Lal said.

He said the refinery has been configured for processing heavy and sour crudes to take advantage of the price differentials vis-a-vis light and sweet crudes.

Refining margins would be higher because of the flexibility to process low cost opportunity crudes and produce high value products.

The refinery would be capable of meeting the Bharat Stage IV quality norms for transport fuels. The Nelson Complexity Index (NCI) which is a measure of the refinery's capability to upgrade low value crudes to high value products, is quite high at 9.6 vis-a-vis its peers.

The major products from the refinery would be Liquified Petroleum Gas (LPG), Naptha, High Speed Diesel (HSD), Kerosene, jet fuel, polypylene, coke.

The refinery would supply to Punjab, Jammu and Kashmir, Himachal Pradesh, Delhi and parts of Haryana and Rajasthan.

UNI RT/BKS PV RK1719