Mumbai: The Guru Gobind Singh refinery at Bhatinda in Punjab will increase its refining capacity to 18 million metric tonnes per annum (mmtpa) and set up a petrochemical complex, people aware of the development said.
The unit, also known as Bhatinda Refinery, is run by HPCL-Mittal Energy Ltd (HMEL), a joint venture between Hindustan Petroleum Corp. Ltd and Mittal Energy Investments Pvt. Ltd, Singapore.
HPCL and Mittal Energy Investments hold 49% stake each in the venture, with financial investors owning the rest.
“Expansion plan for the refinery is in the process and we would be setting up a petrochemical complex as part of the refinery expansion. We are working on the plan and would be shortly finalising details,” said a senior official at one of the partner companies, requesting anonymity.
A banker aware of the development said on condition of anonymity that the company would be funding expansion through a combination of equity and debt syndication by banks to the tune of Rs5,000-6,000 crore.
In an emailed response, HMEL said, “We continue to evaluate various opportunities to enhance and expand our business; however, as a matter of policy we do not comment on future plans.”
The petrochemical unit is part of the expansion that the refinery would undertake. HMEL is currently expanding the capacity of the refinery from 9 mmtpa to 11.5 mmtpa, raising refinery throughput by about 25%. The expansion could cost over Rs5,000 crore. After the target is reached, the capacity would be eventually raised to 18 mmtpa. The expansion could cost the company Rs20,000-30,000 crore, added the banker.
“The petrochemical complex would include a new naphtha cracker,” said the second official aware of the development, also on condition of anonymity.
Engineers India Ltd, an engineering consultancy and engineering, procurement and construction (EPC) service provider, is working on a feasibility report on the refinery’s expansion and the petrochemical unit, the first official cited above said.