HPCL, Rajasthan sign MOU for refinery

Hindustan Petroleum Corp. Ltd. and the government of the Indian state of Rajasthan have signed a memorandum of understanding envisioning a refinery and petrochemical complex at Barmer, near oil fields producing and under development by Cairn India Ltd.

The project, for which no capacity was announced, would be developed by state-owned HPCL, Rajasthan State Refinery Ltd., and other equity partners.

The Indian Ministry of Petroleum and Natural Gas estimated the project cost at $6.85 billion and construction time at 4 years.

It said the complex would use crude oil produced locally and from elsewhere. The complex would represent Rajasthan’s first refinery and India’s first petrochemical plant designed to process indigenous crude oil.

Cairn India, in partnership with state-owned Oil & Natural Gas Corp., is producing about 175,000 b/d of waxy crude oil from a block near Barmer—150,000 b/d from Mangala field and 20,000-25,000 b/d from Bhagyam field. It expects to bring Aishwariya field online soon. It continues to explore in the area (OGJ Online, Feb. 26, 2013).

The operator, which holds a 70% interest in the Rajasthan block, expects production to increase to 200,000-215,000 b/d within a year and eventually to reach 300,000 b/d, subject to government approvals.

Crude from the block now flows through a 590-km, 24-in. heated pipeline to Salaya, Gujarat, for delivery to refineries in the area. Cairn plans to debottleneck the pipeline with drag reduction and to extend the pipeline by 80 km to a marine terminal.