HPCL in parleys with new players for petchem plant

Hindustan Petroleum Corp Ltd (HPCL) has revived plans for setting up a mega petrochemical complex at Visakhapatnam, Andhra Pradesh.

The state-run refiner has started talks with a new set of players for the plant but is looking at a different kind of a partnership now.

“This time we are looking at a joint venture wherein we will supply the entire feedstock required for the petrochem plant to the partner who would build the project,” said K Murali, director, refineries, HPCL.

The Hyderabad-based GMR Group and the Andhra Pradesh Industrial Development Corporation (APIDC) have shown interest in setting up the plant but nothing has been finalised so far, he said.

“We are keen to revive the project and operationalise it in tandem with the expansion of the Vizag refinery, so that the feedstock coming out of the refinery could be supplied directly to the petrochem plant,” he said, adding that the refinery expansion would be complete in three to four years from now.

The plant would be an export-oriented project and cost between Rs20,000 crore and Rs25,000 crore. It would use naphtha as the major feedstock which would be supplied by the Vizag refinery.

The petrochemical complex was planned in 2005-06 and was expected to come up in the proposed petroleum, chemicals and petrochemicals investment region at Visakhapatnam. Total France SA and Mittal Energy Investment Pte were the partners for the project, which was expected to accrue investments of up to $10 billion, or approximately Rs45,000 crore.

But while Mittal Energy exited the project in December 2008, Total walked out in September 2009. After the major partners pulled out, HPCL kept the project on the backburner.

Murali said HPCL has a tie-up for 0.2 million metric standard cubic metres per day (mmscmd) of gas from KG D6 block, which it expects to get soon.

“Our current requirement of gas is 2 mmscmd, out of which majority comes from GAIL Ltd and some would come from RIL. The requirement would go up to 7 mmscmd of gas in the next three to four years once our Vizag refinery expansion is complete,” he said.

The capacity of the Vizag refinery currently stands at 7.5 million metric tonnes per annum.