HPCL Plans to Revive Rs 50,000 cr Petrochem Plant

Hindustan Petroleum Corporation Ltd (HPCL) is working on reviving a massive ₹50,000 crore refinery and petrochemical project near Vizag in Andhra Pradesh. The project, which was stalled years ago due to weak demand, is now being reconsidered to meet the growing need for fuel and petrochemicals in India.

HPCL is reaching out to global energy companies, including France's Total SA and BP Plc, to join the venture. The proposed refinery, with a capacity of 15 million tonnes per year, will be located about 70 km from HPCL’s existing Vizag refinery. Previously, a consortium including HPCL, L N Mittal’s group, Total, Oil India, and GAIL had planned this project, but it was put on hold in 2009 due to poor demand forecasts.

Although HPCL has again approached Total for collaboration, initial responses suggest that the company may not be interested. HPCL is also in talks with Indian energy firms like Oil India (OIL), Indian Oil Corporation (IOC), and Oil and Natural Gas Corporation (ONGC) for potential partnerships.

HPCL’s Chairman, S Roy Choudhury, mentioned that the company expects its petroleum product sales to reach 50 million tonnes by 2025, while its refining capacity will be around 42 million tonnes. Currently, HPCL operates two refineries - a 6.5 million tonne unit in Mumbai and an 8.3 million tonne facility in Vizag. The Vizag refinery is already undergoing expansion to reach 15 million tonnes, and another 9 million tonne refinery is being developed in Barmer, Rajasthan, at a cost of ₹37,320 crore.

The Vizag project was originally planned as an export-focused refinery, targeting markets in Southeast Asia and the Middle East. In 2007, HPCL, along with Oil India, GAIL, Mittal Investment, and Total, signed an agreement to explore its feasibility. While Total conducted demand studies for the refinery and GAIL worked on the petrochemical unit, the project was put on hold in 2010 before finalizing equity partnerships.

Now, HPCL is moving forward with the plan, but land acquisition remains a key challenge. The company has requested 3,000 acres from the Andhra Pradesh government for the project. The refinery is designed to process heavy and sour crude, which is more cost-effective than low-sulfur crude. The petrochemical plant will use naphtha from the refinery as its main raw material.