Hindustan Petroleum Corporation is in talks with three-four foreign companies for picking up 26 per cent equity stake in its 9 million tpa Bhatinda petroleum refinery in Punjab.

Those interested include a Saudi Arabian company (name not available), British Petroleum and Total of France. The foreign investor(s) will hold 26 per cent equity stake in the Rs.12,000 crore project. HPCL will also hold 26 per cent stake while the remaining would be held by the public and others. HPCL has planned to float in IPO, through a special purpose vehicle, Guru Gobind Singh Refineries Ltd, sometime in 2007.

The project cost is inclusive of the Rs.2,500 crore crude pipeline cost. The pipeline would originate at Mundra in Gujarat and would pass through Gujarat, Rajasthan and Haryana before terminating in Bhatinda. The pipeline is expected to be 1,008 km long and is likely to be completed by 2008. The refinery is expected to be ready by 2009.

The company also proposes to develop a petrochemical plant at a cost of Rs 5,000 crore at the Bhatinda refinery complex. This plant could be either a naphtha cracker or an aromatic complex.

HPCL has relaunched its Bhatinda project after a hiatus of seven years. Differences between the Punjab Government and the company over fiscal incentives held up the project. A deed of assurance between Punjab Government and the company for fiscal benefits could not be signed.

A deed of assurance was finally signed on 12 August 2005 between the Punjab government and HPCL. The state government on its part is offering interest-free loan corresponding to local sales tax to be collected by the refinery up to a limit of Rs.250 crore per annum for a period of five years.

Also See:

HPCL progresses with Punjab refinery (9-Jul-05)