IFC may part-finance Bathinda oil refinery's $480mn expansion
The private sector financing arm of World Bank, International Finance Corporation, may part-finance HPCL-Mittal Energy Limited's (HMEL) US $480 million expansion of the recently commissioned Bathinda oil refinery.chandigarh Updated: Sep 21, 2012 19:33 IST
The private sector financing arm of World Bank, International Finance Corporation, may part-finance HPCL-Mittal Energy Limited's (HMEL) US $480 million expansion of the recently commissioned Bathinda oil refinery.
The project involves the rebalancing of the Guru Gobind Singh refinery, a greenfield facility, to increase its capacity from 9 million tonnes per annum to 11.2 million tonnes to keep up with the growing demand in the region. IFC is considering part-financing the project.
"The proposed investment from IFC is a financing package of loans to finance part of the project, which is estimated to cost approximately US $480 million," IFC said. The project will help increase the throughput of the refinery by about 25% with a relatively smaller investment of about 15% of its capital cost.
HMEL - a joint venture between state-owned Hindustan Petroleum Corporation Limited (HPCL) and Mittal Energy Investments Private Limited (a member of the LN Mittal Group) - built the refinery at Rs 21,500 crore. The two companies hold 49% stake in HMEL, while the remaining 2% is with financial institutions.
The refinery, which was formally inaugurated by Prime Minister Manmohan Singh in April, "processes lower grade crude to produce higher value petroleum products catering to demand in the northern part of the country", IFC said.
HMEL may think of raising the capacity to 18 million tonnes at a later date. The refinery has land to double unit's capacity in future. Also, the 1,017-kilometre cross-country pipeline that transports imported crude oil from Mundra, in Gujarat, to the refinery, has a capacity to carry 18 million tonnes a year of crude.
The unit is configured to meet the demand of north India, which currently has a demand of 40 million tonnes of petroleum products. Against this, supplies for units in north are only 25 million tonnes annually. Of its total produce, diesel would constitute 40%, while gasoline or petrol would be about 10%. LPG would be 8% and it will not produce any fuel oil.
First Published: Sep 21, 2012 19:17 IST