Oil public sector units ask AP for funds to set up Kakinada project

New Delhi: Oil PSUs (public sector units) want the Andhra Pradesh government to provide viability gap funding for them to set up a Rs 32,901-crore petrochemical complex in the state, Oil minister Dharmendra Pradhan said on Monday.

Hindustan Petroleum Corp Ltd (HPCL) and gas utility GAIL India had in January last year signed an MoU with Andhra Pradesh for setting up a petrochemical complex at Kakinada, he said in a written reply in Lok Sabha. 

“Feasibility study has been carried out for the petrochemical complex. Oil PSUs have indicated to the Government of Andhra Pradesh that viability gap funding is necessary to make the project viable,” he said. 

He, however, did not give details of how much support have HPCL-GAIL combine asked for. The petrochemical complex at Kakinada was among the projects envisaged in the special package announced in 2014 to boost economy of Andhra Pradesh after Telangana was carved out of it. 

The state government had previously asked the Centre to meet the viability gap of Rs 5,000 crore for the project. Last week, TDP chief and Andhra Pradesh Chief Minister N Chandrababu Naidu withdrew his ministers from the Narendra Modi government, saying the Centre has failed to respect the sentiments of the people of Andhra Pradesh by not granting the Special Category Status. 

Pradhan said Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and HPCL have formed a joint venture, Ratnagiri Refinery Petrochemicals, for setting up a 60 million tonne per annum grassroot refinery-cum-petrochemical complex in Maharashtra at an estimated cost of Rs 3.5 lakh crore. 

“Refinery sector has been delicensed in 1998. Post de-licensing, any public sector or private sector entity can set up a refinery depending upon techno-commercial viability of the project,” he added. India has 23 refineries with a total capacity of 247.566 million tonne per annum.