Jaipur : The Rajasthan government and Hindustan Petroleum Corporation Ltd (HPCL) would sign an MoU on March 14 for setting up an oil refinery in Barmer district of the state.
At its board meeting in Mumbai on Tuesday, HPCL approved the state government’s proposal for setting up a refinery in the state .The state government had given an in-principle approval to provide a financial package of Rs 3,376 crores to HPCL to set up a refinery in the state. This incentive package will continue for 15 years.
The cost of the project of the refinery is expected to be Rs 30,000 to Rs 40,000 crores. Rajasthan government will have a stake of 26 percent in the refinery.The other stake holders will be Cairn India and ONGC.
The oil refinery was a long pending demand of the state and it will be the biggest investment in the district and accelerate economic development besides generating employment opportunities. The Rajasthan government currently gets Rs 5000 crores as royalty from oil and gas. With higher exploration approval given by the Union government to Cairn’s oil fields in Mangala and Aishwarya, the state is expected to get an annual royalty of Rs 8000 crores.
HPCL is also believed to have put Rajasthan ahead of Maharashtra in its refinery commissioning dates.
HPCL is also believed to have put Rajasthan ahead of Maharashtra in its refinery commissioning dates. The refinery in Maharashtra was to be set up at Ratnagiri. Rajasthan can be completed faster than Ratnagiri which is likely to face delays thanks to a slew of environmental clearances required in a ‘sensitive coastal location’. Since both projects have been planned with capacities of 9 mt, it would not impact HPCL’s refining targets over the next four years.