State-owned Hindustan Petroleum Corp Ltd (HPCL) and GAIL India Ltd have shortlisted three sites in Andhra Pradesh for setting up 15 million tons per annum refinery, Oil Minister Dharmendra Pradhan said today. "HPCL and GAIL have carried out a prefeasibility cum configuration study for 15 million tons integrated refinery cum petrochemical complex and also a standalone petrochemical complex," he said.
Financial appraisal of setting up the refinery-cum- petrochemical complex or just the petrochemical complex has also been carried out. "Site selection study for 3 sites, namely, Nakkapalli cluster near Visakhapatnam, Kakinada SEZ in East Godavari district and at Machilipatnam have been completed," Pradhan said in a written reply in the Lok Sabha. The project schedule, he said, would depend on completion of detailed feasibility report, financial appraisal of the project and subsequent approvals. He did not give further details.
GAIL-HPCL are planning the petrochem project after their plans to team up with Frances Total, Lakshmi N Mittal Group and Oil India Ltd for a 15 million tons a year refinery-cum- petrochemical plant at Visakhapatnam in Andhra Pradesh fell through as partners pulled out one after the other due to weak global demand.
The 5-way alliance of HPCL, explorer OIL, gas utility GAIL India, Mittal Investment Sarl and Total in October 2007 had signed a memorandum of understanding to look at the feasibility of setting up the Vizag project.
In 2009, the Rs 50,000 crore projects was put on hold as petrochemical demand then was seen as too weak to justify the investment. Total did pre-feasibility for the refinery project and demand studies, while GAIL was in charge of the study of the petrochemical unit.
But the project in 2010 was put on back burner before equity structure could be decided. While the refinery was to be built to process sour and heavy crudes, which are cheaper than low-sulphur sweat crude oil, the petrochemical plant was to use the naphtha produced in the refinery as feedstock.