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Bathinda Refinery To Start By Oct-Dec

PTI 05 Aug 2011, 17:30:58 IST

Chandigarh, Aug 5: The ambitious 9 million tonne (MT) Bathinda oil refinery is now expected to be commissioned between October and December this year, as work on the HPCL-Mittal Energy Limited (HMEL) promoted project is on the verge of completion.

“We are expecting the commissioning of the oil refinery in October and December this year, as the work is almost complete,” a company official told PTI here.

Earlier, the company had projected that the refinery would be operational in the month of June and July this year. The company has already imported the first consignment of crude oil from Gulf countries, which is being supplied through its 1,014-km-long pipeline laid between Gujarat's Mundra port and Bathinda.

“The crude oil is expected any day at the plant site which will be used for the refinery's trial run,” he said. The work on oil refinery commenced on November 14, 2007 and capital outlay of Rs 18,919 crore was estimated to be spent on setting up the refinery.

After commissioning, the refinery would produce high value petroleum products such as LPG, naphtha, petrol, diesel, aviation fuel, pet coke etc.

The liquid products would be marketed through HPCL, the solid products like sulphur, pet-coke and polypropylene would be sold directly by HMEL.

As per the break up, the capacity of major products like diesel will be 3.7 MT, followed by petrol at 1 MT, LPG 0.7 at MT and coke will be 0.9 MT in the upcoming refinery.

However, the contentious issue of granting additional fiscal incentives sought by HMEL from Punjab government still remained unresolved despite the state authorities' numerous assurances of taking a “fresh look” at the company's demands.

HMEL has been seeking Rs 400 crore per annum as interest free loan for the first 15 years from commissioning -- 2011-12 to 2025-26 -- which is to be paid back per annum from the 16th year, 2026-27, onwards for the next 15 years.

For additional sops, HMEL had reasoned before the state government that the refinery was located at a great distance from sea ports which would cause increased landed cost of crude oil and cost of its marketing, thereby making the refinery less competitive to others.

As per the Deed of Assurance signed on August 12, 2005, the state government agreed to grant interest free loan of Rs 250 crore per annum for the first five years, amounting to Rs 1,250 crore.

After the commissioning of refinery, Bathinda oil refinery would attract an investment of Rs 1,300 crore in Polypropylene-based downstream industry in Punjab.

Bathinda refinery will be one of the few refineries in the country, which will have the capacity to produce 4.40 lakh tonne of polypropylene, an official said, while adding that currently, polypropylene granules are produced in Gujarat and Maharashtra.

With Ludhiana, Bathinda, Banur and Lalru being seen as most attractive locations for the setting up of polypropylene based industry, about 50 per cent of the total produce would be consumed by the state itself, he said.

HMEL is a joint venture between Hindustan Petroleum Corporation Limited (HPCL) and Mittal Energy Investment Pte Ltd, Singapore - a Lakshmi N Mittal Group Company. Both the JV partners hold a stake of 49 per cent each in the company, the rest 2 per cent is held by financial institutions. PTI