Oil PSUs to set up country's biggest refinery in Maharashtra

Public sector oil refining and marketing firms - Indian Oil Corp, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd together with state-run Engineers India Ltd (EIL) will invest Rs1,50,000 crore to set up India's biggest refinery on the west coast.

Union petroleum minister Dharmendra Pradhan said, the 60-million tonne refinery, to be set up in Maharashtra, will produce a whole range of products, including petrol, diesel, LPG, ATF and feedstock for petrochemical plants in plastic, chemical and textile industries.

''Refinery to be built in 2 phases (40+20 million tonnes); 1st phase will have more than Rs1 lakh crore investment (biggest in India),'' Pradhan said in a Twitter post.

IOC has been looking at the west coast for a refinery as catering to customers in the west and south was difficult with its refineries mostly in the North. HPCL and BPCL have also been looking at a bigger refinery because of constraints they face at their Mumbai units.

Pradhan discussed the matter with Maharashtra chief minister Devendra Fadnavis in Mumbai on Monday.

''Government of Maharashtra and the ministry of petroleum and natural gas will closely work for early identification of land for refinery and finalisation of details of project,'' he said.

IOC's largest refinery at Paradip in Odisha has a capacity of 15 million tonnes a year.

Private sector refiner Reliance Industries built the biggest refinery at Jamnagar in Gujarat with a capacity of 27 million tonnes, which it subsequently expanded to 33 million tonnes.

It has built another unit adjacent to it for exports, with a capacity of 29 million tonnes.

The proposed refinery to be built by state-owned firms will be the biggest single refinery unit in the country. Phase I of the project itself will be bigger than any of the existing single refining units in the country – public and private.

The refinery will cost Rs2,500 crore per million tonne throughput with the full 60 million tonne capacity costing Rs1,50,000 crore when completed.  The project will also house a petrochemicals complex.

The coastal location of the refinery will be major advantage for IOC as crude oil can be easily sourced from the Middle East and Africa enabling it to operate with a lower inventory of crude oil as imports can be land at short notice.

The west coast refinery will be the second coastal refinery of IOC, which has most of its refineries located in places such as Panipat, Mathura, Koyali and Barauni in the hinterland.

With the Paradip refinery going on stream, the refining capacity of the PSU oil refiner has gone up to 80.7 MT. IOC has six refineries, besides subsidiary refineries with 11.50 million tonne capacity.