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Second Cals unit in Haldia

Calcutta , Feb. 8: Delhi-based Cals Refinery is planning to relocate one more refinery to Haldia from abroad.

It is close to signing a deal with Petro Canada to acquire the latter’s refinery at Oakville, Ontario, which is in Canada.

The plan is to relocate the plant, equipped to process 5 million tonnes of crude oil a year. Cals will spend Rs 4,000 crore on buying and relocating the facility.

This is the second such project of Cals, owned by SpiceJet promoter Sanjay Malhotra.

Last year, the company had signed an agreement to acquire a Bayernoil refinery at Ingolstadt in Germany and bring it to Haldia.

Cals plans to set up two 5mt refineries and has acquired about 450-500 acres for them.

The refinery from Germany is expected to be operational in the first half of 2010. Equipment is scheduled to arrive in Haldia from March this year.

Cals is setting up the infrastructure required for the first phase.

The Oakville plant is slated to be operational by the end of 2010. Petro Canada had stopped production in 2005 after running the plant for 47 years.

By the end of next year, Cals will have 10mt refining capacity in Haldia and emerge as a significant player in the eastern region. This may make the company an anchor investor at Nayachar, in Bengal, which is the site of a proposed chemical hub.

Cals has proposed another 10mt refinery at the hub. Last week, promoter Sanjay Malhotra and CEO Manabendra Guha Roy met chief minister Buddhadeb Bhattacharjee and sought 1,000 acres for the project.

In all, the company sees three refineries for the state having capacity of 20mt. It will invest Rs 20,000 crore to set up the refineries.

Indian Oil Corporation (IOC) is the other anchor investor in the chemical hub. The PSU has a 7.5mt refinery in Haldia.

IOC has promised to set up a 15mt refinery at Nayachar. However, it has made it clear that it wants a deepwater sea port in the state to make the refinery viable.

The company has steered clear of the Haldia port because of the high cost of operations. The low river depth of the port does not allow the entry of big ships, which lower transport costs.

Instead, IOC has opted for a pipeline to bring crude oil from the Paradip port in Orissa, where big ships can anchor.

To overcome the problem at Haldia, Cals is considering a pipeline for crude from the Dhamra port in Orissa.

The deepwater port is being built by L&T and Tata Steel. The first phase will be ready by next year. Dhamra is located between Haldia and Paradip.

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