State Of The Economy 2017

Testing Times

Even as Assam woos businesses to set up factories in the state, traditional tea and micro units are finding the going tough

Vishal Koul

SK Barua is in a hurry. He has to catch a flight from Guwahati to Delhi at 5 in the evening. “We have proposed a project to triple our refining capacity from 3.0 MMTPA to 9.0 MMTPA and we plan to source incremental crude oil through imports,” says the director (finance) sitting in the corporate office of Numaligarh Refineries (NRL). The refinery is more than five hours away from Guwahati in upper Assam. Barua plans to meet oil ministry officials the next day to pitch for grants and discuss proposals to keep the refinery going. 

Oil was found way back in 1889 in Assam. Despite the presence of more than 100 big and small oil fields in the state, there is a shortage of crude for refineries. “Oil refineries in the North-East are faced with inadequate availability of crude oil and natural gas. Against the total refining capacity of seven million, crude production is 4.2 million in the region, which meets only 60% of the requirement,” continues Barua. To meet this shortfall, imported crude is transported from Paradip in Odisha via Haldia and Barauni. “Thus all four refineries in the North-East (NRL, Guwahati Refinery, Bongaigaon, and Digboi) are operating below their installed capacity, implying that when compared to other refineries in the country, we incur higher operating cost for processing every barrel of crude,” explains Barua. 

A solution, though, exists. Drawing on a piece of paper, Barua explains how building a pipeline beyond Bongaigaon to bring crude to remaining refineries can give a fresh life. But for now, the central government plans to import crude from Nigeria and West Africa to feed Assam’s refineries. “The crude will be imported via Paradip port and then will be brought to the state via Barauni in Bihar,” union petroleum minister Dharmendra Pradhan was quoted as saying.

In the future, a 5,000 km grid of crude pipeline, product pipeline, LPG pipeline and natural gas pipeline is being proposed to be constructed in North-East India. Of the Rs.130,000 crore allocated for the region under the Hydrocarbon Vision 2030 for North-East, Rs.80,000 crore has been allocated for Assam. The allocation for this fiscal is Rs.6,000 crore, which will be invested for implementing various plans, including se


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