Oil & Natural Gas Corporation may be compelled to re-consider the decision to shelve its plans to build a refinery project at Kakinada in Andhra Pradesh.

The company had decided to defer its plans to invest in Kakinada Special Economic Zone and to develop an export-oriented refinery in Kakinada as preliminary reports about the feasibility of the project were not optimistic. As per the preliminary study, the refinery size should be at least 15 million tpa to make it viable, whereas the original proposal was for a 7.5 million tpa refinery with an investment of over Rs.7,500 crore.

ONGC, along with its subsidiary Mangalore Refinery and Petrochemicals (MRPL), had inked two separate MoUs with the state government and infrastructure lender during September 2006. The first MoU was signed between the Andhra Pradesh Government, Infrastructure Leasing & Financial Services (IL&FS) and Kakinada Seaports (KSPL) to promote the Kakinada SEZ through a special purpose vehicle called 'Kakinada Special Economic Zone Ltd'.

The export-oriented refinery will be set up through a joint venture of ONGC-MRPL, the Andhra Pradesh Government and IL&FS.

Also See:

ONGC withdraws from Kakinada projects? (05-Oct-06)