With construction work picking up momentum at the Rs 18,900-crore Guru Gobind Singh Refineries Ltd (GGSRL) being commissioned at Bathinda (Punjab), HPCL-Mittal Energy Ltd (HMEL) is mulling the development of a Rs 2,500-crore petrochemical hub in Ludhiana to process polypropylene.

The hub would produce about 400 tmt of polypropylene, which would act as the mother industry for developing several medium- and small-scale business units in and around Bathinda. It has been envisaged that Punjab would alone consume about 50% of the total produce.

It is to be noted here that HPCL-Mittal Energy Ltd (HMEL) is a joint venture between state-run Hindustan Petroleum Corporation Ltd (HPCL) and Mittal Energy Investment Pte Ltd, Singapore, a Lakshmi N Mittal Group Company. The JV partners hold a stake of 49% each in the company; Indian financial institutions hold the balance.

Talking to FE on Wednesday, chief executive officer, HMEL, Prabh Das, said, ?The demand for polypropylene in the economic supply zone of the refinery is expected to attract investment of about Rs 1,200 crore and generate direct and indirect employment for 4,000 people. The refinery project should take off by February 2011 and we hope the petrochemical hub in Ludhiana would be established around the same time.?

The refinery would produce high value petroleum products such as LPG, naphtha, petrol, diesel, aviation fuel, food-grade hexane and pet coke. While the liquid products would be marketed through HPCL?s marketing network, the solid products, like sulphur, coke and polypropylene, would be sold by HMEL.

Reviewing the progress of the refinery, Ramesh Inder Singh, chief secretary, Punjab, informed, ?About Rs 4,000 crore has already been spent and orders for equipment machinery worth Rs 11,000 crore have also been placed. The Punjab State Industrial Development Corporation is extending full support to establish the petrochemical hub in Ludhiana.?

The funding process for the project is complete. While the debt component is around Rs 11,000 crore, GGSRL has taken loans from 25 banks. The Life Insurance Corporation of India has also given a loan of Rs 7,793 crore towards the project.

For the record, the 9 million metric tonne per annum capacity oil refinery at Bathinda would also have a captive power plant of about 165 mw, a 1,012-km long cross-country crude oil pipeline from Mundra (Gujarat) to Bathinda with a single point mooring and crude oil terminal at Mundra in Gujarat.

The work on these projects is also under progress.