| Big plans
New Delhi, June 11: The Hindustan Petroleum Corporation Ltd plans to team up with Total of France, Kuwait Petroleum and the Oil India Ltd to build a $3-billion refinery at Vishakhapatnam.
“We are sure OIL will be there plus these two companies, Total and Kuwait Petroleum. There is room for everyone. The size of the stakes will be worked out later,” HPCL chairman and managing director Arun Balakrishnan said in Kuala Lumpur, where he is attending the Asia oil and gas conference.
He said instead of expanding the existing refinery at Vishakhapatnam, the company would go in for a greenfield project, which would be integrated with the Rs 9,000-crore petrochemicals complex that the HPCL plans to set up at the proposed SEZ there.
The HPCL has been in talks with Total, Kuwait Petroleum and OIL over taking a stake in the expansion of its Vishakhapatnam refinery for more than six months. Officials had expected to clinch the deal in April.
But Balakrishnan said negotiations had shifted in favour of a greenfield project that would have a capacity of at least 180,000 barrels per day. He also said the deal could mean building an aromatics petrochemical plant before the refinery.
“This would be more of a standalone set-up, not mixed up in the existing refinery,” Balakrishnan said. “We may start with an aromatic unit and retrofit it with a refinery.” The refinery is expected to be completed in around 2011.
The HPCL appears to have decided in favour of a new project as the FDI norms make it easier for foreign investors to join new ventures than investing in existing public sector projects.
The HPCL and Total are already working together to set up an underground cavern storage for LPG in Vishakhapatnam as a joint venture project.
The Indian downstream company wants to build on this relationship for the new coastal refinery.
However, the track record of Kuwait Petroleum has not been very convincing in the country. It had earlier pulled out of the Paradeep refinery project with the Indian Oil Corporation at the last minute. This resulted in delay in implementing the project.