Hindustan Petroleum Corporation Ltd will break ground for the Rs 37,000-crore Rajasthan refinery-cum-petrochemical project by this month end. The project is set to change the very nature of the company’s refining business, said S. Roy Choudhury, Chairman.
Addressing the media after the company’s Annual General Meeting, Choudhury said the project is expected to be fast tracked because the land in Pachpadra village, Barmer district, is already in the Rajasthan Government’s possession.
He said the refinery would give a Gross Refining Margin (GRM) of $12 to $14 per barrel of crude oil.
The GRM is the differential between the cost of a barrel of crude oil and the price at which its processed output can be sold in the market.
The Chairman said the project approval process is under the consideration of the Cabinet Committee on Economic Affairs (CCEA). Once the CCEA approval comes in, a new company would be registered and land would be taken over, he added.
HPCL holds 76 per cent stake in the project, while the rest is held by the Rajasthan Government. The nine-million-tonne a year refinery-cum-petrochemical project would process crude oil from Cairn India’s oilfields and also from imported sources.
Choudhury said that the refinery design is very innovative and it would process about 4.5 mt of crude oil from Cairn India’s Mangala field. The rest of the crude oil would be sourced from the international market, he said.
Given the unique nature of Cairn’s crude, HPCL can process up to 6.3 mt, without carrying out any major modifications to the refinery. If the crude oil supply from Mangala dries up, then the company would be able to still run the whole refinery on imported crude, Choudhury said.
Expanding on the properties of Cairn’s crude oil, B.K. Namdeo, Director (Refineries), said that the crude has high hydrogen content. This, he said, would be helpful in extracting petrochemicals from the crude oil.