The Hindu Business Line : Total, partners to decide on Vizag refinery by year-end

New venture: Mr Murli Deora, Minister for Petroleum and Natural Gas, flanked by Mr Christian Chammas (left), Country Chairman, Total Petroleum India Pvt Ltd, and Mr Mukul Agarwal, Managing Director, Vinergy International Pvt Ltd, in the Capital on Wednesday after announcing the joint venture company Total Vinergy Bitumen India Pvt Ltd. —

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New Delhi, July 9 The consortium of France’s Total S.A., L.N. Mittal Group company, Hindustan Petroleum Corporation, GAIL (India) and Oil India Ltd will take a decision to build a refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh by the year-end.

“Currently, the project is at the pre-feasibility stage. By the end of this year, all partners in this project will know if we are going ahead with it or not,” Mr Thierry Pflimlin, Total’s Senior Vice-President, Asia-Pacific, said.

The pre-feasibility report is looking at demand for petroleum products in India and Asia and project economies including taxation issues. The report is expected to be ready by the end of the third quarter of 2008 after which the steering committee of five partners will meet to decide if the project is to be taken up.

The capacity of the proposed refinery has now been reduced to 14 million tonnes (mt) a year, from the originally planned 15 mt. “We are looking at optimal size of the units available in the market… to ensure that there are no bottlenecks,” he said.

The project is estimated to cost about $6 billion and will take about five years to complete, he added. The refinery would start operations with a focus on the export market, but subsequently may also cater to the domestic oil product market, he said. The consortium had inked a preliminary MoU in October 2007 for the project. The exact equity structure and project finances would be decided only after the feasibility studies are completed.

Bitumen JV

Meanwhile, Total and Vinergy International Pvt Ltd announced their joint venture — Total Vinergy Bitumen India Pvt Ltd — for manufacturing and marketing of value-added bitumen products for Indian roads. The 50:50 joint venture will invest Rs 100 crore over the next three-four years in setting up four bitumen manufacturing plants in the country.

It has already commissioned a plant at Jodhpur. The joint venture is now looking at the Eastern part of the country, followed by South and then the West, Country Chairman, Total Petroleum India Pvt Ltd, Mr Christian Chammas, said.

Mr Mukul Agarwal, Managing Director, Vinergy International, said the four plants would have a bitumen manufacturing capacity of 3 lakh tonnes a year with plans to commission one plant a year. “The country had a demand of 4.1 mt of bitumen as against a supply of 3.7 mt,” he said. The joint venture is expecting $50 million in sales in the first year of operation.

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