New Delhi, Dec. 7: The Oil and Natural Gas Corporation (ONGC) is contemplating adding a mini refinery to its business plans for Assam.

An official of the oil major said a “pre-feasibility report” had been compiled and more surveys would be undertaken before taking a decision. “The report is optimistic about the feasibility of a mini-refinery in Assam.”

The ONGC has a mini refinery with an installed capacity of .5 million metric tonnes per annum at Tatipaka in Andhra Pradesh.

If a mini refinery is set up in Assam, it is likely to be modelled on the one at Tatipaka, which means production will be less than a million metric tonnes.

The proposal to set up a new refinery is part of the ONGC’s plan to intensify business in the Northeast, where it has been exploring oil and gas for over three decades now.

The refineries in Assam are disadvantaged by the inadequacy of infrastructure for transportation of products and insufficient availability of crude oil. Numaligarh Refinery, the newest in the state, has drawn up a plan to lay a pipeline till Siliguri in Bengal to transport its products.

A senior ONGC official, however, said a mini refinery was a better option than laying a pipeline.

“Most of the wells in Assam are located at remote places, from where transportation of oil through a pipeline is an expensive proposition. The best option is to set up a small refinery at the spot, cater to the demands of the neighbouring districts and also sell the products in the local market.”

The proposed ONGC unit will churn out petrol, diesel and lubricants.

Aviation turbine fuel will not be included in the product line, ostensibly because the quality-control mechanism required for it is not considered feasible for a small plant.

The ONGC and Oil India Ltd together produced 170.56 million metric tonnes of oil and 64.34 billion cubic meters of gas in the Northeast till 2001.

The two oil giants drilled 1,412 wells across the region, including 1,376 in Assam, 20 in Arunachal Pradesh, 11 in Nagaland and five in Tripura.

The ONGC plans to invest an additional Rs 2,900 crore in the Northeast, which is part of the Assam-Arakan oil belt. The priority areas are exploration of the Brahmaputra riverbed, hilly and boulder-covered areas and the geologically complex belt along the southern boundaries of the Naga Hills.

In a bid to augment production, the oil major recently re-commissioned the “early production system” at Changmaigaon in Upper Assam after a gap of almost half a decade. The system helps in increasing production because it can handle upto six wells and create larger storage capacity.