Location Shift for Ratnagiri Refinery: Politics will decide the fate

The mega refinery project at Ratnagiri could be in cold storage for now but the script could change after the national elections in May.


“Politics has prevailed for now but this is only a temporary setback,” said an industry source familiar with the project.
Earlier this week, the feuding BJP and Shiva Sena had agreed to scrap the refinery’s originally planned location at Nanar in coastal Maharashtra as one of the conditions for coming together in the elections.
This was not entirely unexpected. The site has been in the eye of a storm for over a year now with locals opposed to the idea of a refinery coming up in an environmentally-sensitive region.
This is also not the first time that such a project has been conceived in Ratnagiri. Over two decades earlier, Hindustan Petroleum Corporation (HPCL) and Oman Oil Company had explored the idea of setting up a refinery in this belt but shelved the proposal eventually.
More recently, HPCL toyed with the idea of relocating its Mumbai refinery to Ratnagiri since it was in the middle of a residential area. But, this was put on hold since it was quite apparent that there would be delays associated with environmental clearances.
In the case of this 60 million tonne refinery, where Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) are the lead promoters with 25 per cent equity each, the intent is to make it a reality given the energy needs of the country and the challenges ahead with Bharat Stage-VI emission norms in 2020. The public sector trio of IndianOil, Bharat Petroleum Corporation and HPCL will account for the balance 50 per cent stake. The project is scheduled to be commissioned by 2025.
The election results will clearly have a bearing on the pace of completion. Assuming that there is no change in the political equations, a coastal location in Maharashtra will be persevered with as top priority.
Whether Nanar can still be reclaimed is a million dollar question though this will need a lot of persuasive skills and generous compensation payouts.
The biggest challenge is the size of the refinery which will kick off with 40 mt in the first phase before reaching its optimal capacity of 60 mt. This means that there needs to be enough land available to accommodate such a gigantic project.
It remains to be seen if alternative locations can also fit the bill. Clearly, the lead promoters are willing to wait but what if there is no progress even after many months? After all, the case of HPCL’s Rajasthan project being in limbo for five years now is largely due to a result of changes in the State government.
The silver lining in the cloud is that oil companies from West Asia are clearly bullish on India. There have been reports of Kuwait Petroleum Corporation keen on participating in BPCL’s Bina refinery where Oman Oil is already a partner. Likewise, both Aramco and Adnoc would like to make the most of what India’s energy economy has to offer in the coming years.
Courtesy: thehindubusinessline

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