Hindustan Petroleum Corporation Ltd (HPCL) has zeroed-in on Lote Parshuram area, in coastal Ratnagiri district of Maharashtra, for setting up a 9-15 million tonnes per annum refinery, a top company official said on Thursday.
The refinery is being set up in Maharashtra to cater to the increasing demand emanating from west India, he said.
"In order to meet the growing demand in west India and to secure and strengthen our position in this market, we felt it was necessary to pursue the option of setting up a new greenfield refinery," HPCL Chairman and Managing Director, Subir Roy Choudhury, told reporters here.
Feasibility studies are being carried out and land is being identified for the proposed facility. Environment clearance will be needed for the refinery, expected to be ready in about 3-4 years, Choudhury said.
He did not disclose the investment in the project.
About 1,500 acres would be needed for the refinery. The company's Mumbai refinery is very old and its cost of modernisation would be prohibitive and hence a greenfield refinery is being set up, Choudhury said.
HPCL has a capex plan of Rs 4,000 crore in the current financial year, of which it plans to spend Rs 900 crore for retail expansion (500-600 outlets in rural areas), he added.
Another Rs 1,030 crore has been earmarked for modernisation of the Mumbai refinery. Another Rs 643 crore has been set aside for the one at Visakhapatnam to set-up additional crude storage tanks, Choudhury said.
Asked about a possible initial public offer for its Bhatinda refinery, undertaken by HPCL-Mittal Energy Ltd, Choudhury said all financing for the project has been tied up. "We'll look at the option of an IPO after 7-8-months."
HPCL-Mittal Energy is a joint venture between the state-run refiner and Mittal Energy Investment Pte, a Singapore- based L N Mittal Group company.
While both entities hold a 49 per cent stake each in the joint venture, the remaining two per cent is being held by IFCI and State Bank of India.