Cabinet set to sign off on ₹22,000-cr Numaligarh Refinery expansion

P Manoj Mumbai | Updated on January 13, 2019 Published on January 13, 2019

A file photo of Numaligarh Refinery in Assam. Oil refiners are facing difficulties in supporting demand in the North-East Bloomberg   -  Bloomberg

NDA govt continues its focus on wooing North-East voters

State-run oil refiner Bharat Petroleum Corporation Ltd (BPCL) is close to getting cabinet backing to expand the capacity of its refinery located at Numaligarh in Assam’s Golaghat district by 6 million tonnes with an investment of ₹22,000 crore. The Narendra Modi-led government is expected to sign off on the expansion plan that includes a viability gap funding (VGF) and tax concessions from the Centre as the ruling party pushes ahead with its aim to woo voters in the North-East with mega projects in the run-up to the general elections.

North-East States send 25 lawmakers to Lok Sabha.

Numaligarh Refinery Ltd, 61.65 per cent owned by Maharatna PSU BPCL, currently refines 3 mt of crude a year. The refinery was set up in 1999 following the Assam Accord.

Push from govt

Oil India Ltd holds a 26 per cent stake in the refinery with the Assam government holding the balance equity. The joint venture partners are treating the expansion as a separate project having a different configuration from the existing refinery, a government official said. “The proposal has secured full support of the Petroleum and Finance ministries. So, the cabinet approval is a mere formality. Since it is a project in the North-East, there will be a lot of push from the government,” the government official said. BPCL confirmed the plan.

Oil refiners are facing difficulties in supporting demand in the North-East where the growth has outstripped other regions. “Because, the growth is so fast in the North-East, we were trying to expand capacity to ease the market,” the official said. The refinery will also supply products to Bangladesh.

LPG production capacity

Maharatna PSU Indian Oil Corporation Ltd (IOCL), meanwhile, will raise the capacity of the LPG bottling plant at its Bongaigaon Refinery, also in Assam, chairman Sanjiv Singh said on Saturday. The enhanced LPG production capacity at the refinery will be commissioned this year, he said, adding this will increase the LPG production in the North-East five times.

LPG production capacity is being raised as part of modification work that will hike the refinery’s capacity marginally to 2.75 mt from 2.35 mt. “The next expansion of Bongaigaon refinery to 4.5 mt is linked to the new crude pipeline Numaligarh refinery will lay for its expansion, because there is no crude in that region to support the expansion. When Numaligarh lays the new pipeline from Paradip to its refinery for its expansion, all these refineries will get connected,” Sanjiv Singh said.

The shipping ministry, meanwhile, has submitted a proposal to the finance ministry for augmentation of navigation capacity of national waterway 2 (NW-2 on river Brahmaputra) in Assam with technical and financial assistance from the World Bank, on the lines of the Jal Marg Vikas project on NW-1.

A scoping mission of the World Bank visited NW-2 and NW-16 (also in Assam) during December 10-14, 2018, according to a ministry document. BusinessLine reported this development on December 18, saying the World Bank was looking to lend more than $100 million to the Inland Waterways Authority of India (IWAI) for developing NW-2.

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Published on January 13, 2019
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