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Chennai Petroleum Corporation (CPCL), a subsidiary of Indian Oil Corporation (IOCL), said it has kickstarted the activities for the establishment of proposed 9 MMTPA grass root refinery, to be developed along with IOCL, at an estimated cost of ₹31,580 crore at Nagapattinam, Tamil Nadu.
Procurement and engineering activities for the project have already commenced and site activities will now gain momentum. The project will act as a catalyst for development of downstream petrochemical and ancillary industries, according to a statement.
Structure
The refinery project is being set up with a debt-equity ratio of 65:35. The project is proposed to be executed through a joint-venture company with 50 per cent ownership to be held equally by CPCL and Indian Oil Corporation and balance 50 per cent by other strategic or financial investors, to be identified at a later stage.
CPCL will restrict its equity contribution to 25 per cent of the total equity of the JV company, which would be ₹2,570 crore and the same will be funded mainly from the internal resources of CPCL during the period 2021-25.
The new refinery project, for which the Prime Minister laid the foundation stone through video conference mode in February 2021, is expected to be completed in 45 months’ time. The Government of Tamil Nadu has approved an incentive package to the project as per the Tamil Nadu Industrial Policy 2014.
During the first week of this month, the company also received the State government order for acquisition of 606 acres of land parcel adjoining the existing refinery site, at Nagapattinam. Chief Minister of Tamil Nadu handed over the order to SM Vaidya, Chairman, IOCL.
Immediately after the receipt of the order, CPCL awarded contracts amounting to ₹1,538 crore to Project Management Consultants Engineers India (EIL), McDermott and Tata Consulting Engineers (TCE).
Arvind Kumar, Managing Director, CPCL took stock of the existing infrastructure at Karaikal Port and its applicability for evacuation of products after commissioning of the new project.
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