HPCL plans petrochemical unit at Barmer Refinery

State-run Hindustan Petroleum Corporation Limited is planning a petrochemical unit along with Barmer Refinery, according to a CNBC-TV18 report.

Crude produced at Cairn Energy's Rajasthan facility is suitable for petrochemicals, sources told CNBC-TV18.

The petrochemical project may cost Rs 8,000 crore, sources said.[caption id="attachment_462826" align="alignleft" width="380"] New units coming up. Reuters[/caption]

The feasibility report of the proposed plant will be submitted by November, sources said. The company also plans to set up 9 MT wellhead refinery at Barmer.

On 2 August, Vedanta Resources evinced interest in taking a stake in HPCL's refinery in Rajasthan, after state-owned Oil India. Cash-rich OIL is keen to take up to 10-15 percent stake in refinery HPCL plans to build near the Barmer oil finds of Cairn India.

Sources said preliminary discussions have been held but nothing has been finalised so far. HPCL is to hold 51 percent stake in the $4 billion project while state-owned engineering consultancy firm EIL would take 5 percent.

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Vedanta Resources, which last year acquired Cairn India for $8.67 billion, is interested in taking a small equity of up to 5 percent in the project. ONGC, which owns 30 percent interest in the Barmer oilfields of Cairn India, had in 2005 committed to building the refinery in Rajasthan but later had a change of heart.

Sources said after HPCL decided to take up the project, ONGC, which originally had the authorisation from the government for processing the Barmer crude at the proposed refinery, too evinced interest in taking 26 percent stake.

However, HPCL is not keen on giving anything more than 16.96 percent to ONGC.