JAIPUR: A day after the Union Government gave a go ahead for the Barmer Refinery project, the Rajasthan Government on Thursday signed a joint venture agreement with Hindustan Petroleum Corporation Ltd (HPCL) for the upcoming mega petroleum refinery in Barmer at a cost of Rs. 43,129 crore.
Under the agreement, HPCL will hold 74 per cent stake in the joint venture, HPCL Rajasthan Refinery Ltd, while the State Government will hold the remaining 26 per cent. The agreement was signed here in the presence of Chief Minister Vasundhara Raje by the Secretary of Mines and Petroleum, Aparna Arora and HPCL's Director (Finance) J Ramaswamy.
The project envisages laying a crude oil pipeline (50-60 km in length) and a water pipeline (nearly 200 km in length). The capacity of the refinery is 9 million metric tonnes oil per annum. The State Government will pay Rs 3,738 crore for its 26 per cent equity. The government will provide interest free loan (the viability gap funding) of Rs 16,845 crore to HPCL.
Ms.Raje expressed satisfaction at the progress of the establishment of the refinery and said that all necessary approvals for the refinery would be acquired in the prescribed time frame. She further said it was the State Government's endeavor to commence the work immediately after ground breaking ceremony. The CM claimed that re-negotiation with HPCL had led to significant savings, to the tune of Rs. 40,000 crore.
The state will now get 12 per cent return on investment (investment income) than the 2 per cent fixed in the previous agreement. Barmer refinery would be the country's first refinery project to manufacture petro-products of BS-6 standard and will be an environmental friendly project, Ms. Raje said.The project is being set up to prepare petroleum and various types of petro-chemical products from Rajasthan crude oil.
She instructed the officials to prepare the local youths for jobs in the refinery and related industries through ITI and skill development centres. Ms.Raje also asked officials to explore the possibilities of establishing a petroleum institute in West Rajasthan.
During the signing ceremony, Water Resources Minister Ram Pratap and Minister of State for Minerals and Petroleum, Surendra Pal Singh, Chief Secretary Ashok Jain, HPCL CMD MK Surana and Additional Chief Secretary of the State Mines and Petroleum NC Goyal and other senior officials were present.