Barmer refinery MoU to be inked on Tuesday
The Rajasthan government is all set to ink a memorandum of understanding (MoU) with HPCL on Tuesday to set up India’s first Bharat Stage-VI (BS-VI) oil refinery and petrochemical complex in Pachpadra area of Barmer district, a senior official said.
In 2013, the previous Congress government had signed an MoU with HPCL (Hindustan Petroleum Corporation Limited) to set up a 9-million-tonne refinery-cum-petrochemicals project with an investment of ₹37,000 crore. The Vasundhara Raje government put the project under review in July 2014, questioning the less share to the state and the interest-free loan package.
“Under the new MoU, though the project cost escalated to ₹43,129 crore, it will be based on new technology supporting BS-VI norms,” the senior official of the mines and petroleum department told HT on Monday.
“The viability gap funding (VGF), which was ₹3736 crore for 15 years to be given by state government, has come down to ₹1123 crore.”
The state government’s return on investment has been increased to 12% from 2%. The government will invest ₹20,865 crore in 15 years as VGF and equity share (26%) in the refinery.
“It is a much better deal at lower cost and improved configuration. The refinery in Barmer will be India’s first on BS-VI norms – environment-friendly and less pollution. The project life will be 30 years after it starts operations,” the official said on condition of anonymity.
The refinery will produce 2.5MT crude annually. The refinery will remain operational even if the oil level depletes as crude oil will be imported with no additional financial burden on the state. “The company will bear the cost,” the official said.
On the steps taken to reduce VGF, the official said, “Earlier the slurry hydrocracking technique was to be used, now it will be delayed coker.”
The power plant of the refinery will generate electricity from pet coke (refinery waste product); earlier gas was to be used to generate power. “Now gas will be used for petro-chemical complex. Through pet coke around 250MW power will be generated, of which 200MW is required for the refinery,” the official said.
After facing criticisms from the Opposition over delaying the project, the chief minister announced in the recent budget session that the government will ink an MoU this month on new terms and conditions, which are in the state’s interest. She criticised the Congress government for signing the previous MoU in a haste.
Agreement with GAIL
The state government will also sign an MoU – business transfer agreement — with the Gas Authority of India Limited (GAIL) on Tuesday.
Under the MoU, the assets made by GAIL in Kota for city gas distribution through pipelines will be handed over to the Rajasthan State Gas Limited, a joint venture of the Rajasthan State Petroleum Corporation Limited (RSPCL) and GAIL with 50-50 partnership.
RSPCL is owned by the Rajasthan State Mines and Mineral Limited.