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Will the 60-mt Nanar refinery see the light of day?

Murali Gopalan Mumbai | Updated on April 30, 2018 Published on April 30, 2018

Residents of Nanar village in Ratnagiri district stage a protest against the proposed oil refinery project. (file photo)   -  The Hindu

The west coast refinery jinx continues in the midst of a political tussle

Call it the Ratnagiri jinx, but it is a million-dollar question if the gigantic refinery in Nanar becomes a reality.

Over the last few weeks, it has been the core of an aggressive tug-of-war between the Shiv Sena and the BJP in Maharashtra. At 60 million tonnes, it is a massive project which promises to herald a new chapter in the country’s oil refining roadmap. Yet, going by past experience of refineries planned in Ratnagiri, it will be a miracle of sorts if this project at Nanar gets off the ground.

It was in this very district where Hindustan Petroleum Corporation and Oman Oil had planned a six-million-tonne refinery at Guhagarh over two decades ago. This was the west coast refinery which never saw the light of day after Oman Oil pulled out.

Many years passed since and, more recently, HPCL decided to look at setting up a refinery again near Chiplun, Ratnagiri district. Its capacity was planned at 15 million tonnes with a capital outlay of ₹30,000 crore. From HPCL’s point of view, this refinery was critical as its decades-old facility at Mumbai was in dire need of an overhaul apart from its sensitive location near residential communities.

The Maharashtra Refinery, as it was called, was put on the back burner, while HPCL quickly decided to fast-track plans for an alternative in Rajasthan instead. It was quite apparent that there would be inevitable delays on land acquisition and environmental clearances in the sensitive Ratnagiri ecosystem.

In the meantime, of course, HPCL has now changed hands and is now within the fold of the Oil and Natural Gas Corporation. It also has a stake in the Nanar refinery along with IndianOil and Bharat Petroleum Corporation, while Saudi Aramco will be the single largest shareholder with 50 per cent equity.

Yet, it remains to be seen if this project will be the exception to the rule in Ratnagiri and see the light of day. The protests will continue and there is a lot at stake politically both for the BJP and Shiv Sena with elections due in 2019.

On the face of it, this refinery will be a big help from the viewpoint of supplying BS VI diesel and petrol, while paving the way for Aramco’s entry into the refining and fuel retailing arena. However, timely completion will be a challenge if the protests continue.

In that case, an alternative site may be considered, but this will have to factor in a coastal location, since there will be large shipments of crude coming in. The truth is that almost all refinery projects have faced delays since it is not the easiest of tasks going through the arduous process of acquiring land along with a host of other hurdles.

For instance, IOC’s Paradip refinery took time in commissioning, which was equally true for BPCL’s Bina project. Both were part of the Centre’s joint sector refinery plans of the early 1990s, while the third, HPCL-Oman Oil, was shelved.

Likewise, work on HPCL’s Rajasthan refinery was to have started five years back, but the project again got caught in a political crossfire. It has been revived now but that does not mean that it will be completed anytime soon. The fate of the Nanar refinery, similarly, hangs in the balance.

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Published on April 30, 2018
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