He recalled the refinery cut crude on July 14 last and started despatching products to public sector oil companies in just two weeks' time, six months ahead of schedule. The entire project was well within the budgeted cost and it has been ensured that both the plants and products met world-class standards.

"Successful start-up of the refinery in just three to four months is a singular achievement when compared to other international or Indian refineries taking six to 12 months for stabilisation," he said.

He said it has been ensured that the refinery's per tonne cost is significantly lower than that of similar global projects, adjusted for complexity and product quality with access to potential for enhanced integration.

"The RPL refinery is expected to generate a turnover of Rs 22,000 crores in its first full year of production. Returns to equity investors are expected to further improve as the production has already commenced. Its successful financial and operational performance is likely to find due appreciation and drive higher valuations."

He said there was good news even for debt investors: "RPL's current investment grade credit ratings and overall credit quality are expected to improve significantly as the project starts generating revenues and cashflows."

"The simple economics of scale of the entire Jamnagar project -- comprising a FCC (fluidised catalytic cracker, coker and reformer, besides an aromatic and petrochemical plant by Reliance Industries, with access to a pipeline network -- is designed to produce higher value-added products. The premium quality products would naturally command higher prices and translate into higher profitability."

GAIL is building the cross-country LPG pipeline connecting Jamnagar refinery with north India even as Vadinar-Kandla pipeline was being integrated with the existing Kandla-Bhatinda pipeline.

Explaining the RPL's efficient logistics, he said, it takes just four days for crude tankers from oil producing Middle East countries to reach the all-weather port with berthing facility for ultra large crude carriers of up to 300,000 dwt for Jamnagar refinery, leading to considerable savings in freight and refining.

Having gained confidence of completing the Jamnagar complex, Ambani hinted that the Reliance group could now execute any infrastructure project in the country -- be it port, highways, airfields, power plants, housing complex, water supply system of IT network.

Ambani recalled that initially investors were sceptical about investing in the refining sector. No international company had come forward to invest even a single dollar in the Indian refining sector. Now, RPL enjoyed the confidence of two million investors, with the second largest investors' base, next only to its promoter RIL.

"The compounded annualised return to investors who participated in the RPL's initial public issue and the subsequent option offer is 35 per cent. The Sensex yielded only around 11 per cent per year during the same period, indicating a strong outperformance by RPL."

The Reliance Group has invested nearly Rs 24,000 crores on the Jamnagar project spread over 31 sq.km. -- the single largest investment ever made at a single location in India. The entire project included, besides the refinery, India's largest 50 mtpa port terminal, 10 million tpa fully automated rail-road loading and product despatch terminal, 3.5 million tonnes tank farms, 500 mw power plant, 12 mgd sea water desalination plant, 1,000-giga byte IT network connecting 50 servers and 2,500 terminals with 200 km long optic fibre cables.

Ambani complimented 4,000 engineers and other professions and 85,000 construction workers, besides contractors and vendors -- who completed the project in less than 36 months as against the world average of 48 to 60 months.

INSIGHT:

Asian refineries margins to be squeezed further

Reliance Petroleum will be achieving full production at a time when refining margins in Singapore are in the red. Companies in Singapore relied substantially on India and China for their exports. However, with the complete commissioning of Reliance refinery, Singapore refineries will be further hit which will lead to drop in product prices in the Asian market. As far as the Indian scenario is concerned, the refinery can produce 90 per cent of light and middle distillate. Which will make the country self-sufficient in its fuel requirements. The current hike in product prices and the fact that crude oil has been sourced at pre-OPEC production cut prices is likely to benefit the company a lot.

-- Shishir Asthana