India’s west coast has caught the attention of IndianOil and Hindustan Petroleum Corporation as the ideal location for their new refineries.
It is, of course, a million dollar question when these projects will be commissioned given the financial state of these companies coupled with the fact that environmental clearances will be hard to come by.
HPCL, in fact, has a longer link with the west coast. In the early 1990s, it teamed up with Oman Oil Company to kick off a six-million- tonne refinery in Maharashtra’s Ratnagiri district. The project never saw the light of day and HPCL wisely decided to focus, instead, on the Bhatinda refinery, a joint venture with the Lakshmi Mittal group, which is up and running.
Two decades later, HPCL is keen on revisiting Ratnagiri with its Maharashtra Refinery, originally conceived to replace the decades-old Mumbai facility. This plan has since been modified to have a scenario where both projects can co-exist. The Maharashtra Refinery is now proposed to be commissioned post-2017 in two phases of nine mt apiece.
IOC, likewise, is eyeing the west coast at a time its Paradip refinery is still a year away from commissioning and has already had its share of cost overruns. Yet, this has not deterred the company which believes it is important to enhance its refining presence in this part of the country.
Oil industry sources, however, reiterate that neither HPCL nor IOC will have the going easy for their projects. “There are bound to be delays in getting environmental clearances because these are green zones and, hence, sensitive. The fact that there is surplus refining capacity in India will also go against both companies,” they say.
It is here that Mangalore Refinery and Petrochemicals will be seen as a lost opportunity, especially for HPCL which was the co-promoter of the project, along with the AV Birla group, but ended up losing it eventually. It is a decision that still hurts the company even though it has a marginal 17 per cent stake in MRPL with Oil and Natural Gas Corporation in the driver’s seat with 72 per cent.
IOC was also in the fray for MRPL at one point when it was known that it was up for grabs. For reasons best known, the oil major slipped up the opportunity and ONGC was quick to grab it instead. MRPL was initially planned as the ideal launch for the upstream major to enter refining and marketing but this never materialised with the Petroleum Ministry categorical that ONGC focus on its core competence of exploration.
murali.gopalan@thehindu.co.in