Sonia Gandhi and M. Veerappa Moily at Pachpadra on Sunday. (PTI)
Pachpadra, (Barmer), Sept. 22: Cairn India may consider picking up a stake in the 9-million-tonne oil refinery-cum-petrochemical complex in Barmer to be set up by HPCL and the Rajasthan government.
“We could consider the option of picking up a stake in the oil-refinery-cum-petrochemical complex if such an opportunity arose,” P. Elango, chief executive officer of Cairn India, told The Telegraph.
He said Cairn would supply crude to the project, which is a joint venture between HPCL and the state government.
The Rs 37,230-crore refinery project could be the first in the country to draw 100 per cent indigenous crude in the future, petroleum minister M. Veerappa Moily told reporters after UPA chairperson Sonia Gandhi laid the foundation for the project here. The project is expected to be commissioned by 2017.
HPCL will hold up to 74 per cent stake in the project, while 26 per cent will be with the Rajasthan government. HPCL’s equity contribution is Rs 11,020 crore for the 74 per cent and the state’s contribution is Rs 3,872 crore at 26 per cent, according to a proposal cleared by the Union cabinet.
Rajasthan has also agreed to provide interest free loan of Rs 3,736 crore every year for 15 years from the date of commencement of production. The same is to be repaid by the joint venture in equal annual installments from 16th year, after commercial production starts, for the next 15 years.
The refinery will source half its crude oil from Cairn’s Barmer oilfields, while the remainder will be imported. Besides petrol, diesel and LPG, the project will also produce 2.3 million tonnes of petrochemical products such as polypropylene, polyethylene and aromatics which are used to make plastic.
Moily said production from Cairn India’s Barmer oil fields would go up to 300,000 barrels per day (bpd) by the time the new refinery was in place (2017-18) from 175,000 bpd.
“The clients of crude produced from Cairn blocks such as Reliance and Essar are not tuned to take such high sulphur waxy crude in a higher quantity. Though the cabinet has cleared the project with 50 per cent dependency on imported crude, we expect the production to go up, once clearances are in place for Cairn,” Moily added.
The minister said the refinery would add another 6 million tonnes (mt) capacity from 9 mt if Cairn’s oil production was higher by 2017.
“We are drilling more wells and have sought the permission of the government to ramp up production. If our estimated production is about 300,000 barrels per day, it would be able to meet the 15 million tonnes production capacity of the refinery,” Elango said.
Cairn India has also sought the government’s permission to re-explore surrendered blocks.