Steel billionaire LN Mittal has set into motion plans for his second major investment in India's crude oil refining sector.
Mittal signed a memorandum of understanding (MoU) on Thursday with state-run companies Hindustan Petroleum Corporation Limited (HPCL), Gas Authority of India Limited (GAIL), Oil India Limited (OIL) and Total of France to set up a $6-billion refinery and petrochemical complex at Vizag in Andhra Pradesh.
The feasibility study for a 15-million-tonnes per annum refinery and a 1-million-tonnes petrochemical complex is expected to be completed by March next year. Mittal had earlier picked up a 49 per cent stake in HPCL’s 9-million-tonnes Guru Gobind Singh Refinery at Bhatinda.
“The five partners have signed an MoU today to study the feasibility of the refinery-cum petrochemical complex. The exact equity structure and the project cost would be decided only after the feasibility studies are completed,” HPCL Chairman and Managing Director Arun Balakrishnan said.
Total of France will lead the feasibility study for the refinery project, while GAIL would take charge of the feasibility study for the petrochem unit.
Balakrishnan said the expansion plan for the existing 7.5-million-tonnes refinery at Vizag to 15 million tonnes was on schedule. “The refinery is currently operating at 9 million tonnes capacity parameters,” Balakrishnan said. The expansion will entail a capital expenditure of Rs 9,000 crore.