HPCL setting up 2 new refineries as part of Rs61,000-cr expansion

State-owned refiner HPCL is building a new 9 million tonnes-per-annum refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh as part of a Rs61,000-crore expansion.

HPCL will also invest part of the amount over the next four years for expanding and upgrading its existing refining capacity to meet higher quality fuel norms, the company said in an investor presentation.

HPCL is upgrading both its Mumbai and Visag refineries to produce fuel meeting Euro-VI emission norms.

"Major planned investments in refinery, POL (petroleum, oil and lubricants) distribution and natural gas projects," the company said in the presentation.

HPCL will invest Rs20,928 crore to expand capacity at its Visag refinery in Andhra Pradesh from 8.33 million tonnes per annum to 15 million tonnes by July 2020.

Also, the Mumbai refinery is being expanded to 9.5 million tonnes a year from current 7.5 million tonnes at a cost of Rs4,199 crore.

The investment plans are irrespective of the proposal by Oil and Natural Gas Corp (ONGC) to buy out the government's 51.11 per cent stake in HPCL. Since HPCL will turn into a subsidiary of ONGC, even if the proposal gets government nod the investment plans would not change, an official explained.

The cabinet may this month accord approval to ONGC's proposal.

HPCL also plans to expand its Mundra-Delhi, Visag-Vijayawada and Ramanmandi-Bahadurgarh pipelines to meet rising fuel demand.

Besides, new LPG lines will be laid and bottling plants set up to cater to the increased demand for cooking gas.

HPCL said it is building a new 9 million tonnes per annum refinery-cum-petrochemical complex at Pachpadra in Rajasthan and a petrochemical complex at Kakinada in Andhra Pradesh.

It also holds a 25 per cent interest in the mega 60 million tonnes refinery being set up by state-owned firms led by Indian Oil Corp (IOC) on the west coast of Maharashtra.

Of the Rs61,000 crore to be invested till 2021, Rs23,400 crore will be in refining, Rs23,600 crore in marketing infrastructure and another Rs13,000 crore in joint venture projects.

The joint venture projects include the west coast refinery, petrochemical complex at Kakinada, a 5 million tonnes LNG import terminal at Chhara in Gujarat and a fuel farm facilities at Mumbai airport.

HPCL has planned a capex of rs7,```0 crore for the current financial year compared to Rs5,860 crore in the previous financial year.

Besides, the two refineries at Mumbai and Visag, HPCL owns 14,412 petrol pumps and 4,532 LPG distributor agencies in the country.

The company, which had a net profit of Rs 2 crore in 1973-74, posted a record Rs6,209 crore net profit in 2016-17.

HPCL said its borrowings have come down to Rs21,250 crore as of March 2017 from Rs33,789 crore in March 2013. Net worth has risen from Rs13,726 crore to Rs20,347 crore in the same period.