ONGC to set up refinery in Barmer

New Delhi, Mar 20 (UNI) Public sector Oil and Natural Gas Corporation (ONGC) has urged Rajasthan state government to consider the recquired fiscal incentives and support for the viability of huge investments in the well-head refinery project in Barmer.

''On receipt of a favourable consideration of the incentive package and other support from the Rajasthan government, ONGC would be able to draw a road map for development of the refinery,'' Minister of state for Petroleum and Natural Gas Dinshaw Patel told the Rajya Sabha in a written reply.

The Minister said considering that Rajasthan crude is heavy and viscous which needs to be heated for transportation, short duration of peak production necessitating import of crude, limited market potential in Rajasthan promting export of products and other factors, ONGC has approached the government of Rajasthan for incentives/concessions to make the refinery project financially viable, the Minister said.

Considering the difficult characteristics of the Rajasthan crude oil, being very heavy and highly waxy in nature (with very high pour point) and the difficulty in transporting it to a distant refinery location for further processing, it was envisaged that feasibility of setting up a well-head refinery be explored by a joint venture of MRPL, ONGC and CAirn Energy India Ltd (CEIL).

Crude oil production from Rajasthan, where large quantities of oil and gas reserves have been found, is expected to commence in 2008-09.

"There is large oil and gas find in Rajasthan and reserves are there. The proposal for setting up a refinery at Barmer is under consideration of Oil and Natural Gas Corporation Limited (ONGC)," the Petroleum Minister, Murli Deora had said earlier.

He said the Government had received a request from Rajasthan Chief Minister Vasudhara Raje in January this year for establishing a refinery in her state.

Mr Deora said consequent on de-licencing of refinery sector since June 1998, it was not the Government but the private-public sector enterprises which have to decide on setting up a refinery based on commercial considerations.

UNI