The idea of a power plant was mooted more than three years ago when the refinery was conceived. However, the thinking at that time was that the state had surplus power apart from the fact that there were some hurdles relating to environment clearance. Since then, the situation has changed and now there is a need to augment power supply in Karnataka.

Whether MRPL takes up the offer remains to be seen as a power plant with a capacity of, say, 500 mw would require an investment of at least Rs 1,500 crore. It would also require international technical know-how from top names like Lurgi, Texaco and Powergen. In any case, sources add, it would at least take three years to commission the project from the time of submitting the detailed feasibility report.

The obvious advantageswould be foreign exchange savings on coal imports as the residue from the refinery will act as fuel for the plant. From the point of environment protection, there will be no fly-ash generated. "It is a viable proposition except that this is a time consuming process," experts say.

MRPL, a 26:26 venture of Hindustan Petroleum Corporation and the AV Birla group of companies, is presently expanding the capacity of its refinery from three million tonnes to nine million tonnes. It is also increasing the capacity of its captive power plant to 67.5 mw from 45 mw.

Oil companies have identified power as a key area of operations for the future. Indian Oil Corporation, for instance, has already planned two plants in Panipat and Sawli, Gujarat, with capacities of 301 mw and 500 mw each. Marubeni and Mitsubishi will be the partners for these projects which are expected to be operational by 2002.

Likewise, the Oil and Natural Gas Corporation (ONGC) and National Thermal Power Corporation (NTPC) are planning to set up a300 mw plant in Hazira, Gujarat. It is likely that IOC will be the third partner in the plan where the combined holding of the PSUs will be 50 per cent so that the venture remains a non-government company.

Madras Refineries is also planning to set up a 500 mw plant near its Manali refinery where the fuel, as in the case of MRPL, will be heavy residue. The estimated cost of the project, which will be executed as a joint venture with Larsen & Toubro, is Rs 1,100 crore. Cochin Refineries is planning to set up a plant on the same lines as also Hindustan Petroleum Corporation in Vizag.

Consultants to make presentations

At least five top international consultants are scheduled to make presentations to the MRPL board this week on the prospects of direct marketing of petro-products. The names doing the rounds include Arthur Andersen, Arthur D Little and Boston Consulting Group though this could not be confirmed from company officials. MRPL's products are presently marketed by HPCL but it would makemore sense for the stand-alone refinery to contemplate direct selling post APM as this is where the real money lies. All this, of course, would depend on the verdict of the consultant roped in for the exercise.