HPCL gets cabinet nod for refinery complex in Rajasthan
21 Sep 2013
The union cabinet on Friday approved the proposal of state-owned Hindustan Petroleum Corporation Limited (HPCL) to set up a 9-million tonnes per annum greenfield refinery-cum-petrochemical complex in Barmer district of Rajasthan.
The project, to be named HPCL-Rajasthan Refinery Limited (HRRL), will be set up as a joint venture between HPCL and the government of Rajasthan.
The proposed refinery will function as a subsidiary of HPCL, with 74-per cent of its equity to be held by HPCL and the remaining 26 per cent to be held by the government of Rajasthan.
The project, estimated to cost Rs37,230 crore, will have a debt / equity ratio of 1.5:1.
Total equity component will be Rs14,892 crore and debt Rs22,338 crore.
HPCL's equity contribution in the project will be Rs11,020 crore (74 per cent) and Rajasthan government's equity contribution Rs3,872 crore (26 per cent).
HPCL had, on 14 May 2013, signed a memorandum of understanding (MoU) with the Rajasthan government for setting up the refinery-cum-petrochemical complex. Subsequently, HPCL also signed a joint venture agreement with the government of Rajasthan on 11 July 2013 on the terms for setting up the refinery as a joint venture.
The proposed refinery will process 4.5 million tonnes of crude from nearby Mangala oil field of Cairn India and 4.5 million tonnes of crude to be sources from Gulf Arab countries and other sources.
The project will bring direct and indirect economic benefits to Rajasthan, resulting in substantial increase in income, output, employment and tax earnings, an official release said.