Sonia to lay foundation stone, HPCL's Rs 37,229 cr refinery gets Cabinet nod

New Delhi: The Union Cabinet today approvedsetting up of HPCL's Rs 37,229 crore refinery-cum-petrochemical complex in Rajasthan, just ahead of the plannedfoundation stone laying of the project by UPA ChairpersonSonia Gandhi.

Gandhi is scheduled to lay foundation stone of HindustanPetroleum Corp Ltd's (HPCL's) 9 million tonnes (MT) refineryat Pachpadra in Barmer district of Rajasthan on Sunday.

The Cabinet Committee on Economic Affairs (CCEA) at itsmeeting this morning approved the project, official sourcessaid.

[caption id="attachment_1122441" align="alignleft" width="380"] Representational image. Reuters[/caption]

HPCL is to hold up to 74 per cent stake in the project,while the balance 26 per cent will be with Rajasthangovernment.

Sources said the function at Pachpadra will also beattended by Rajasthan Chief Minister Ashok Gehlot and OilMinister M Veerappa Moily.

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Rajasthan government has also agreed to provide interestfree loan of Rs 3,736 crore every year for 15 years from thedate of commencement of production.

The same is to be repaid by the joint venture in equalannual installments from 16th years after commercialproduction commences for the next 15 years.

Sources said HPCL will have the marketing rights,including first right of refusal in respect of uplifting andpurchase of all products (including petrochemials), which

would be produced by the refinery.

The refinery, which is planned to go on stream in fouryears, will source half its crude oil from Cairn's Barmeroilfields, while the remainder will be imported.

Besides petrol, diesel and LPG, the project will alsoproduce 2.3 MT of petrochemical products such aspolypropylene, polyethylene and aromatics which are used formaking plastic.

PTI