HPCL to invest Rs3,000 crore for expansion
23 Sep 2008
Public sector petroleum marketing company Hindustan Petroleum Corporation Ltd (HPCL) will invest Rs3,000 crore in 2008 as part of its expansion plan to revamp its refineries and improve the quality of its products.
According to the company, a substantial part of the money will be spent on construction of its greenfield refinery at Bhatinda and expanding capacity of the plant in Visakhapatnam from 7.5 metric tonnes per annum to 14 mtpa.
The Bhatinda refinery was floated as an equal joint venture of 49 per cent each between HPCL and Mittal Energy. The remaining stake lies with financial institutions. The joint venture is being financed in a 1.5:1 debt-equity ratio with an equity investment of Rs 3,800 crore each by Mittal and HPCL.
In addition, HPCL-Mittal have also joined hands in laying a 1,100-km crude oil pipeline from Mundra port in Gujarat to Bhatinda.
The Bhatinda plant has a production capacity of nine-million tonnes per annum plant and is expected to be commissioned by March 2011, said HPCL chairman and managing director Arun Balakrishnan
The refinery will help HPCL reduce its dependence on crude oil imports as the oil refineries have a total crude refining capacity of 17 million tonnes. The company's borrowings, primarily on account of crude purchase, at the end of the June quarter stood at Rs19,000 crore, up from Rs16,000 crore in March.
