The Chennai Petroleum Corporation Ltd (CPCL) has formally sought government approval for its ambitious Cauvery Basin Refinery Project in Tamil Nadu, valued at Rs 36,400 crore.
The company had acquired about 1,300 acres of land in Nagapattinam for setting up a refinery with a capacity of 9 Million Metric Tonne Per Annum, CPCL Managing Director H Shankar said on Tuesday.
In March 2024, Indian Oil Corporation, the parent company of Chennai Petroleum Corporation Ltd, had said its Board gave approval for the revision in cost of the project from Rs 29,361 crore to Rs 33,023 crore.
Briefing reporters here, Shankar said CPCL has planned to set up a 9 MMTPA refinery in Nagapattinam as the earlier refinery established in 1992 had a capacity of 0.5 million metric tonne.
"It was operational upto 2019. At that time, the oil production did not improve much. It remained at 0.5 MMT only. We were supplying oil from Chennai Port to there (Nagapattinam) so that operations can be sustained (in that project)," he said.
However, the refinery was shut down in 2019 and there was a plan to build a larger refinery which is called 'Cauvery Basin Refinery' and that was the original plan, he said.
In 2021, final approval for a new refinery in Nagapattinam was approved by the government and in 2023 the acquisition started and the land was acquired.
Meanwhile, it was decided that IndianOil would hold 75 per cent stake in the project and the remaining 25 per cent with CPCL compared to the earlier Joint Venture plan of 50 per cent stake between IOCL and CPCL and the remaining 50 per cent would be with a 'third-party strategic investor', he added.
"After IndianOil became 75 per cent partner and CPCL will be a 25 per cent partner, with that arrangement we went back to the Ministry of Petroleum and Natural Gas for necessary approvals. But then since there is already a gap of 3-4 years, the government felt that we should do a reworking on the costing. So, we have reworked on the cost and that is what the cost is Rs 36,400 crore. Based on that we are seeking the approvals." It was also decided to improve the petrochemical intensity that would be produced from the refinery project upon its completion, he noted.
"We are looking at different configuration styles on how it will suit the site. With that reworked configuration, we will go back to the Ministry and then seek necessary approvals (for it)." Shankar said the earlier plan was to build a refinery in Nagapattinam and later in Phase II the company would produce a higher level of petrochemical intensity product as real value from a refinery comes by the sale of petrochemicals.
"So the petrochemical at that point of time when the refinery configuration was made, we had designed a polypropylene plant and that was the only petrochemical part involved in it," he said.
