Chief minister Oommen Chandy signed the pact with BPCL chairman RK Singh on the final day of the three-day Emerging Kerala meet.
The agreement involves raising the production capacity of Kochi Refineries from the present 9.5 million MT to 15.5 million MT and setting up of a petrochemical complex. This would give direct employment to 10,000 people and indirect jobs to 25,000 others, marking a radical change in Keralas industrial annals, RK Singh said.
In a goodwill gesture, the Kerala government will allow tax reliefs and take only nominal interest on credit, the chief minister said. The refinery expansion will cost about R14,225 crore.
The BPCL is planning to invest in the range of R5,000 crore to R6,000 crore on the petrochemical complex project to make super-absorbant polymer using propylene. This would be set up in association with Korean petrochemical giant LG Chem. The Kerala government is also planning to maximise the downstream processes of the project.
About 1.3 MMTPA of petcoke will be produced as a byproduct. Utilising this, value-added processes could be weaved in as projects for Kerala Minerals and Metals (KMML) and Travancore Cements, Chandy said. Experts say that this could also be utilised to produce low-cost power, he added. The project is expected to be commissioned by 2015, according to Singh.
The environmental clearances are expected by the end of October.