MRPL puts off new refinery plan; to invest Rs12,000 crore in capacity expansion

Mumbai: Mangalore Refinery and Petrochemicals Ltd has put on hold plans to set up a grassroots refinery and instead will invest around Rs12,000 crore to expand capacity to 15 million tonnes by October 2011.

MRPL plans to fund the project cost in a debt-equity ratio of 2:1 but the company need not borrow funds till 2009-end.

''Refinery completion will happen well in time for availing the income tax holiday,'' MRPL chairman R S Sharma said, adding,''We have been finding it difficult to find contractors as most say their hands are full.''

The cost of expansion has gone up from Rs8,000 crore in 2006 to Rs12,000 crore now, MRPL director (finance) L K Gupta, said.

MRPL, a unit of state-run Oil and Natural Gas Corp (ONGC), has however put on hold plans to construct a new 15 million tonne refinery and adjacent aromatic and naphtha cracker projects.

''Its not that we have dropped the project but have kept it on hold as there were huge only-for-exports capacities coming up,'' he said.