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Centre hikes cost estimate of refinery and petrochemical project

Thursday, 08 Aug 2019
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The Central government has increased the cost estimate of refinery and petrochemical project to be jointly built with Saudi Aramco and Abu Dhabi National Oil Company in Maharashtra.


The cost has been increased by more than 36 percent after the plant was relocated. The 1.2 million barrels per day coastal refinery in Maharashtra is now expected to be built at Roha in Raigad district.

The new cost estimate of USD 60 billion for the refinery was given to Saudi Arabia's Minister of Energy Khalid al-Falih. The USD 60 billion is a preliminary estimate that was told to Saudi Arabia. The final number will be decided on the basis of a detailed feasibility study. The project cost at the signing of a deal with Saudi Aramco in 2018 was pegged at USD 44 billion.

Despite the cost expansion, the project is still expected to be commissioned in 2025. The cost escalation is mainly due to delay in land acquisition for the project and the need to rework all calculations. The Maharashtra government will acquire land at new site by December-end 2019.

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