Foreign firms may pick up stake in coastal refinery project: IOC Chairman

Foreign oil companies may take a stake in the ₹1.80 lakh-crore coastal refinery project in Maharashtra to be set up by the State-run oil PSUs. The project will require about 15,000 acres, said Indian Oil Corporation (IOC) Chairman B Ashok on Wednesday. He was addressing the media after chairing the AGM of the company.

Ashok said some foreign players have shown interest in the project. Once the land parcel gets finalised along with mandatory clearances, formal talks could be held with the partners. The State Government has identified six potential sites and further due diligence is underway. Although IOC has said that it will require 15,000 acres, the final size of the land parcel will depend on the quality of the land, he said.

He said that today the understanding between IOC, BPCL and HPCL is that, IOC will hold 50 per cent stake while rest would be held equally by BPCL and HPCL. But with a foreign player coming in the future, this arrangement could change. Considering the demand growth for fuels in the country, IOC is very actively considering the coastal refinery project. Coastal refinery will provide tremendous flexibility in terms of sourcing crude oil. Ashok pointed that the project will be an integrated refinery and petrochemical complex. The technological aspects of the project have been chalked out and products to be made at the site have been planned.

Setting up a coastal refinery in Maharashtra has been on the agenda of the Ministry of Petroleum for many years. HPCL even attempted to set up the refinery but it faced massive opposition from local villagers due to environmental concerns. The locals fear that their economy, which is primarily based on fisheries business and plantation crops such as mangoes and cashews, could get damaged due to the emissions from the refinery.

However, Chairman IOC said that the company was confident of getting all the necessary environmental clearances, “It will be a mega venture, which will adhere to all the environmental norms,” he said.

On the expansion plans of the company, Ashok said that in the next four to five years, all the refineries of IOC will undergo brownfield expansions, which will help in producing the BSVI grade fuels. This expansion would add 24 million tonnes of additional refining capacity. By 2021-22, IOC will cross 100 million tonnes refining capacity. Today IOC and its subsidiaries have about 80 .5 million tonnes of refining capacity, he said

Ashok added that globally India is seen as an economic bright spot with its seven per cent growth. This will further drive energy demand, therefore IOC is putting in place the infrastructure and capability for meeting those needs. The company’s infrastructure building is also calibrated according to the global trends.

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