Centre steps in to speed up Barmer refinery and petrochem hub work

Petroleum Minister Puri to take stock of the delayed project on Tuesday

The government has asked state-owned Hindustan Petroleum Corporation (HPCL) to expedite the construction of India’s largest upcoming integrated refinery and petrochemical complex, the Rajasthan Refinery Project (RRP).
 
Union Minister for Petroleum and Natural Gas Hardeep Singh Puri would visit the refinery on Tuesday to take stock of the progress, sources told Business Standard.
 
The initial estimate of the project -- coming up near Pachpadra town in the Barmer district -- was Rs 43,129 crore, which has now increased to Rs 72,000 crore.
 

Sources said the Centre’s latest push to complete the project quickly was expected as a fast-changing geopolitical climate continues to make existing purchase agreements for crude tenuous and prices volatile.

 
With an eye on India's fast-growing appetite for oil, the Centre is working to raise the total crude refining capacity in the country to 450 million metric tonnes per annum (mmtpa) from 250 mmtpa now.
 
The HPCL Rajasthan Refinery (HRRL), a joint venture between HPCL and Rajasthan government incorporated back in 2013, is overseeing the construction of the project. While HPCL has 74 per cent of the equity in HRRL, the Rajasthan government owns the remaining 26 per cent stake.
 
HRRL had initially targeted setting up the greenfield project comprising a 9 mmtpa refinery and a 2 million tonnes per year petrochemicals unit by 2017.

 
While the foundation stone of the refinery was initially placed in 2013 by erstwhile UPA Chairperson Sonia Gandhi, work on the project began only in 2018, with Prime Minister Narendra Modi again inaugurating the commencement of work.
 
Touted back then as the single biggest investment at one location in the country so far, the project had set a new deadline of 2022. HRRL had then also stated that the project will be mechanically completed within four years from the last date of receipt of all statutory approvals.
 
“One of the main components of the project — the nine main refinery units and four main petrochemical units — has taken more time to construct than earlier estimated. That has had a knock on effect on the overall timeline,” a senior official working in the project said.

 
March 2024 remains the tentative deadline for setting up all the refinery units but four of the units may reach operational levels in the next three months, he added. About 8,000 workers are working at the project site.
 
The last major construction goal to be completed was the erection of the bottom section of the Regenerator for Petrochemical Fluidized Catalytic Cracker (PFCC) Unit last month, another official said.
 
PFCC is a piece of refining equipment used to convert the heavy portion of crude oil feedstock into lighter petroleum products, including liquefied petroleum gas and gasoline.
 
Blame game

 
Over the past few years, the state government has repeatedly pointed out spiraling cost overruns and delays, and sought the Centre's help to quickly finish the project.
 
The Ashok Gehlot-led government is betting big on RRP owing to its large potential for generating stable employment in the dry, largely rural Marwar region that straddles the western side of the state.
 
HPCL has said the project, once it goes live, is expected to create 40,000 direct and 60,000 indirect jobs. A township, schools, hospitals, a dedicated green zone, and other amenities are expected to come up as the state hopes to recreate neighbouring Gujarat’s success at Jamnagar.

 
The RRP itself is set to act as an anchor unit for developing downstream and other service-sector industries in and around the region.
 
Gehlot has blamed his predecessor Vasundhara Singh Raje and the BJP government, which ruled the state till 2018 for going slow on the project.
 

STILL WORK IN PROGRESS
 

2013: Foundation stone laid by erstwhile UPA Chairperson Sonia Gandhi
 
2018: Work began with PM Narendra Modi again inaugurating the commencement of work
 
2022: Initial deadline set
 
March 2024: Tentative deadline

 

COST OVERRUN

Initial estimate Rs 43,129 cr
 
Now: Rs 72,000 cr

 

JOB OPPORTUNITIES
 

40,000 direct jobs
 
60,000 indirect jobs