The Hindu Business Line : HPCL scouting for foreign partner for Bhatinda project

HINDUSTAN Petroleum Corporation Ltd (HPCL) is set to finalise a joint venture overseas partner for its 9-million-tonne per annum (MMTPA) refinery at Bhatinda in Punjab.

"Talks are at an advanced stage with three-four foreign companies for a 26 per cent equity participation in the project. We expect to finalise the partner in a month or two," Mr M.B. Lal, Chairman and Managing Director, HPCL, told presspersons here today.

Besides a Saudi Arabian company, British Petroleum and the French company Total are understood to be among the contenders.

Elaborating on the equity structure of the Rs 12,000-crore refinery project called the Guru Gobind Singh Refineries Ltd (GGSR), Mr Lal said, the while 26 per cent each would be held by HPCL and the global partner, the rest would be with the public for which there would be an initial public offering (IPO) sometime in 2007. The project cost of Rs 12,000 crore is inclusive of the Rs 2,500-crore crude pipeline cost. The pipeline would originate at Mundra in Gujarat and would pass through Gujarat, Rajasthan and Haryana before terminating in Bhatinda.

The pipeline is expected to be 1,008 km long and is likely to be completed by 2008. The refinery is expected to be ready by 2009.

The company also proposes to develop a petrochemical plant at a cost of Rs 5,000 crore at the Bhatinda refinery complex. This petrochemical plant, according to Mr Lal, could be either a naphtha cracker or an aromatic complex, which would help add economic value to the refinery.

After a gap of seven years HPCL relaunched its Bhatinda project. The project was earlier expected to be completed by 2004-05. However, hiccups between the Punjab Government and the company held up the project. A deed of assurance between Punjab Government and the company for fiscal benefits could not be signed.

A deed of assurance was today inked between the State Government and HPCL. The Punjab Government on its part is offering interest-free loan corresponding to local sales tax to be collected by the refinery up to a limit of Rs 250 crore per annum for a period of five years.

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