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HPCL says decision on Rs 37,000-cr Raj refinery likely soon

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Mumbai, Sep 9 (PTI) A final decision on the much-delayedRajasthan refinery, to be set up by Hindustan PetroleumCorporation for an estimated over Rs 37,000 crore, but has runinto a political quagmire, is expected within a few months. "A committee has been formed to look into the feasibilityof the project. Our refinery director BK Namdeo is also amember of the panel, which is expected to submit the report intwo to three months," HPCL Chairman and MD Mukesh Kumar Suranatold reporters here last night on the sidelines of the AGM. The UPA government had announced a 9-mmt refinery atBarmer in Rajasthan to be set by HPCL at an estimated cost ofRs 37,320 crore. From the start, the project had attractedcriticism, which only increased after the Congress lost boththe Central and State polls and BJP came to power in thestate. For HPCL, which has only two refineries at Mumbai andVisakhapatnam, the project would have been a big boost as itsexpansion projects are facing environmental issues. The proposed refinery for which an MoU had been singed bythe company and the then Ashok Gehlot government of the state,would use mostly the locally available Rajasthan crude, aswell as other crude and will be designed to produce motorfuels. Current Chief Minister Vasundhara Raje of BJP, who was notendorsing the agreement between the Gehlot government andHPCL, had been renegotiating the terms for setting up therefinery. Raje wants HPCL to bring down its internal rate ofreturn to 12-13 per cent from 15 per cent targeted by therefiner. The plan came after environmental issues threatened toderail HPCL’s plan to set up a 9 mmt refinery in Maharashtra’sRatnagiri district. HPCL, which plans to scale up capacity to 42 mmt per yearfrom current 16 mmt, was to partner with Rajasthan StateRefinery to set up the Barmer facility. Surana said the company will invest around Rs 7,000 crorethis year while the next five year’s capex is planned at Rs55,000 crore, most of which will be used for the expansion ofits existing refineries. Out of this, Rs 20,900 crore areearmarked for the Visakhapatnam refinery expansion. On retail expansion ahead of Reliance and Essar Oilplaning a big play, Surana said being the second largestretailer with over 13,800 filling stations as of March 2015,the company has added 100 pumps in the first quarter and willbe adding 500 more through the rest of the year. PTI BEN NRBANUSDM

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