Bhubaneswar, Oct. 16: The prospect of a Memorandum of Agreement (MEA) between the Orissa government and the Centre for setting up a petroleum, chemicals and petrochemicals investment region (PCPIR) in Paradip appears to be bright.

Sources said the state has sent a communiqué and note-draft for the project to the Centre. This is considered mandatory for signing the MEA. “We have sent the proposal. Now we are waiting for their response,” said a senior official.

The PCPIR will come up over an area of 284.15 square kilometre near Paradip in Jagatsinghpur and Kendrapara districts with a proposed investment of Rs 2,77,734 crore.

“The proposal received from the state government is being sent to ministry of environment and forests (MoEF) for its comments. The proposal includes a preliminary environment impact assessment. Once it is approved, the state government will carry out an environmental impact assessment,” said a top official of the ministry of chemical and fertilizers.

Industries minister Raghunath Mohanty said: “The project would be beneficial to the state. The industrialisation process is moving in the right direction. Barring a few, most big-ticket projects have come up in the state.”

Chief secretary Bijay Patnaik had held a meeting on the PCPIR project last July. The development commissioner is also likely to hold a meeting soon to discuss various aspects of the project, officials said.

Exuding confidence, Union minister of state for chemical and fertilizers Srikant Jena told The Telegraph: “The PCPIR will certainly come up in the state. A move has already been made. We are working vigorously to make it a reality.”

He further said that the Cabinet Committee on Economic Affairs (CCEA) had already approved the proposal or the PCPIR. “The MEA will be signed with the state government shortly,” Jena added.

The Indian Oil Corporation (IOCL) will be the anchor tenant for the project. The PCPIR will also include the IOCL’s refinery at Paradip, which in the first phase, would have an investment of Rs 29,777 crore. The refinery will have a crude and vacuum distillation unit, a hydro-cracking unit and a delayed coker unit. It will also have an integrated gasification combined cycle plant for production of steam, power and hydrogen from petroleum coke for captive use in the refinery.

Another leading player, Deepak Fertilizers, would set up a greenfield ammonium nitrate plant in the PCPIR. Tata Steel and South Africa-based Sasol have expressed interest in setting up a coal-to-liquid project under the PCPIR. The project is likely to come up by 2018 in an area of 3,000 acres. The plant would produce 80,000 barrels of liquid fuel from coal each day.

According to the plan, Rs 13,634 core would be invested for infrastructure development in the PCPIR. Out of this, the Centre will provide Rs 716 crore under viability gap funding to ensure infrastructure linkages such as rail, road (national highways), ports, airports and telecom through public-private partnership. The state’s share will be Rs 1,796 crore while the remaining Rs 11,122 crore would be generated through private participation.