Petro corridor: HPCL to set up petrol-chemical complex

HYDERABAD: The long-pending Visakhapatnam-Kakinada Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) is likely to take shape with the State-run Hindustan Petroleum Corporation Ltd (HPCL) relooking its earlier proposal to set up a greenfield refinery-cum-petrochemical complex. The project may encompass investments to the tune of $10-12 billion.

According to senior company officials, HPCL is roping in another public sector major GAIL India and an MoU is likely between both next month. This is the first major industrial investment being announced in Andhra Pradesh after bifurcation of the State.

The proposal was made originally in 2008 but didn't take off due to economic downturn. 'We are in talks with GAIL for a possible tie-up and we expect a formal understanding by next month,' said H Kumar, executive director, Corporate Strategy & Planning, HPCL.

Speaking to newsmen here, he said the company was also in the process of conducting a feasibility study and an environment impact assessment for the proposed 15 mmtpa refinery in PCPIR, expected to be completed in six months.

Besides setting up a new refinery complex, HPCL will also expand capacity at its refinery in Visakhapatnam from the current 8.3 mmtpa to 15 mmtpa. 'This expansion will require investments of about `5,000-6,000 crore spread over 3 to 4 years,' he said.

HPCL operates two refineries one located in Mumbai and one in Visakhapatnam.

Meanwhile, the AP government said it was considering allotment of land to HPCL for the greenfield plant in Visakhaptnam-Kakinada PCPIR, which is the longest petro chemical corridor in the country.

''We have land and if they (HPCL) want 3,000 or 5,000 acres we will allot them as per the project proposal,' said JSV Prasad, Principal Secretary, Industries and Commerce.

Meanwhile, the Department of Chemicals and Petrochemicals will submit a draft national chemical policy to the Central government shortly.

According to Indrajit Pal, Secretary (Department of Chemicals and Petrochemicals), under the Ministry of Chemicals and Fertilizers, there exists an import-export imbalance and the proposed policy will bridge the gap. ''We have grown from $110 billion to $140 billion in a span of two years.

The objective of the policy is to make it grow further. The imports are about Rs 2.34 lakh crore and exports are in the range of Rs 1.78 lakh crore. We need to bridge the gap. We need to increase domestic production,' he said.