HPCL ropes in Mittal, Total for $6 billion refinery-cum-petrochemical project

Mumbai: State-run oil company HPCL has signed an agreement with steel baron Lakshmni Mittal and French oil major Total for jointly setting up a $6 billion refinery-cum-petrochemical complex at Vishakhapatnam.

Gas utility Gail India and exploration firm Oil India Limited will also have stakes in the proposed 15 million tonne refinery-cum-petrochemical complex.

"The five partners have signed a memorandum of understanding (MoU) to study feasibility of the refinery-cum petrochemical complex," HPCL chairman and managing director Arun Balakrishnan said.

Total will conduct a feasibility study for the refinery project while GAIL would be in charge of the feasibility study for the petrochemicals unit.

Mittal already has a 49 per cent stake in HPCL''s Bhathinda refinery in India.

The exact equity structure and the project cost would be decided only after the feasibility studies are completed, Balakrishnan said.

He also did not give anytime frame for the new mega refinery-cum-petrochemical complex. "All depends on the feasibility report." About 2,500 acres of land near HPCL''s existing 7.5 million tonne a year refinery at Visakhapatnam has been acquired for the project.

"The plant in all probability would come up in a special economic zone and fuel produced by the refinery would be exported to markets in South-East Asia and Middle East," an executive said.

While the refinery would be built to process sour and heavy crudes, which are cheaper than low-sulphur sweet crude oil, the petrochemical plant may use the naphtha produced in the refinery as feedstock.