Decks have been cleared for setting up of the much awaited nine million tonne per annum refinery at Barmer in Rajasthan. A new Memorandum of Understanding (MoU) will be signed shortly for setting up of this Rs 37000 crore refinery project that will come up as a joint venture between central PSU Hindustan Petroleum Corporation Ltd (HPCL) and the state government.
“Rajasthan Government and HPCL have come together to set up a 9 MT refinery in Barmer…..Modi Government’s gift to people of Rajasthan on Rajasthan Diwas,” union petroleum minister of state (I/C) Dharmendra Pradhan tweeted on Thursday.
— Dharmendra Pradhan (@dpradhanbjp) March 30, 2017
Earlier in the day, while replying to the Finance and Appropriation Bill, 2017 in the Assembly, Rajasthan Chief Minister Vasundhara Raje said a lot has been talked about the refinery and the state government will ink an Memorandum of Understanding (MoU) with HPCL with new terms and condition, which will be in interest of the government.
Officials confirmed that the state government will soon sign a new MoU with HPCL by next month for setting up of the 9 million tonnes per annum (mtpa) refinery in Barmer at a cost of around Rs 37,000 crore.
— Vasundhara Raje (@VasundharaBJP) March 30, 2017
As per the previous MoU, Rajasthan government had to pay a huge interest-free loan every year for 15 years, which would have added a massive financial burden on the state government. “We started reviewing the project in July 2014 and initiated renegotiation with the HPCL. Though we took time, despite increase in project cost, the expenditure on state will reduce by two-third,” the chief minister said on Thursday.
She added that the interest free loan will reduce to Rs 1,123 crore per annum and the financial burden too will reduce to Rs 16,845 crore. This indeed is a massive relieve for the state exchequer.
Chief Minister Raje said that after hard negotiations, the state equity in the project has been reduced by Rs 100 crore.
“HPCL is happy to partner in progress of Rajasthan by setting 9MMT Barmer Refinery,” HPCL also tweeted on Thursday. The Barmer refinery will mostly consume the locally available Rajasthan crude (from Cairn India’s oil and gas fields) besides other crude varieties.
— Hindustan Petroleum (@HPCL) March 30, 2017
It is important to note here that Rajasthan has become the second largest crude oil producer in the country after the offshore field Bombay High. Oilfields in the state (of ONGC and Cairn India) were producing nearly 90 lakh tones oil annually, which is 24% of the total domestic crude oil production.