The deadline for commissioning of the $60-billion mega refinery has already been extended by three years to 2025 from 2022 due to land acquisition hurdles.
Indian Oil Corporation (IOC) CMD Sanjeev Singh said on Wednesday the west coast refinery project, in which Abu Dhabi National Oil Company and Saudi Aramco are to hold 25% stake each, is on track. “The project is relevant. In its absence, the country may not be able to meet its domestic requirements in the coming years, given the demand for refined and petchem products,” Singh told FE.
The deadline for commissioning of the $60-billion mega refinery has already been extended by three years to 2025 from 2022 due to land acquisition hurdles. Besides, the project cost has also risen from $44 billion at the time it was proposed to $60 billion. The land acquisition process for the world’s largest refinery-cum-petrochemical complex with a refining capacity of 60 million tonne per annum (MTPA) on India’s west coast has begun. The detailed project report is likely to be ready by end December. India’s state-run oil marketing companies — Indian Oil, BPCL and HPCL —will equally share a 50% stake in the joint venture.
Should the refinery project materialise, the investment by Saudi Aramco and Adnoc — who are looking to invest in the entire oil value chain including fuel retailing — will be the biggest in the sector. Earlier the project was supposed to be located in Maharashtra’s Ratnagiri district, but thanks to large -scale protests by farmers, the project will now be located in Raigad district.The formal communication from the state government on the allocation of land is still awaited.
The project is expected to be viable despite a fair bit of brownfield expansion and modernisation by all the public sector oil marketers and even the private oil companies such as Reliance Industries and Nayara Energy (formerly Essar Oil).
Saudi Aramco is expected to supply 50% of the crude oil requirement for the refinery and will also share technology. The project, once operational, is expected to increase India’s GDP by around 2% while Maharashtra’s GDP will get a boost of 12%.Global consulting firm Jacobs is working on the configuration of the refinery which is expected to have 30% facility dedicated for petrochemicals. The IOC chairman said IOC was looking at a greenfield refinery in Nagapatanam as well.