Oil PSUs sign pact for 60 million tonne west coast refinery

State-run refiners and oil marketing companies Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) on Wednesday signed a joint venture agreement to set up the world's largest refinery-cum-petrochemicals complex in the west coast of India.

The West Coast Refinery Project, to be set up in Ratnagiri district of Maharashtra at an investment of Rs2,00,000 crore (about $30 billion), will have an annual refining capacity of 60 million tonnes per annum (MMTPA).

Indian Oil Corporation will be the lead partner with 50 per cent stake while Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd will take 25 per cent stake each.

IOC chairman Sanjiv Singh, HPCL chairman and managing director Mukesh Kumar Surana and BPCL chairman and managing director D Rajkumar signed the joint venture agreement in New Delhi on Wednesday.

Officials said the 60 million tonnes capacity refinery at Babulwadi, Taluka Rajapur in Ratnagiri district is being set up keeping in mind the future fuel demand and the export potential of the country.

The government last year announced that the three OMCs will be building a 60 million metric tonnes per annum (MMTPA) refinery along with a petrochemicals complex in Maharashtra.

In 2016, Petroleum and natural gas minister Dharmendra Pradhan tweeted that the first phase of the complex will be built with an investment of more than Rs1,00,000 crore.

"The 60 MMTPA West Coast Refinery-cum-petrochemicals complex will be a state-of-the-art unit built at an estimated cost of $40 billion, and is expected to be commissioned by the year 2022," the Indian Oil Corporation said in a statement.

"It will be a green refinery comprising 50 units designed to operate at the highest level of efficiency, and will be self-sufficient in power and utilities requirements, besides creating a benchmark in environment management."

According to Indian Oil, the refinery along with a petrochemicals complex is designed to produce Euro-VI and above grade of transportation fuels.

"The refinery will have in-built flexibility for processing a wide spectrum of light and heavy crude oil grades, utilising various blending techniques," the statement said.

"It will also be able to produce on-demand product mix of petrol and diesel streams, as well as other refined products and petrochemical streams with the highest level of integration and energy efficiency."

With a refining capacity of 232.066 million tonnes, which exceeded demand of 194.2 million tonnes in 2016-17 fiscal, India has turned a net exporter of petroleum products.

However, according to International Energy Agency (IEA), this demand is expected to reach 458 million tonnes by 2040.

IOC has 11 refineries with a total capacity of 81.2 million tonnes while BPCL has four refineries with a total capacity of 33.4 million tonnes. HPCL has three refineries with a total capacity of 24.8 million tonnes. The three OMCs together have a refining capacity of 139 million tones, which will reach 200 million tonnes with the setting up of the West Coast refinery.