The Union Cabinet has approved the proposal of Hindustan Petroleum Corporation Limited (HPCL), to set up a 9 MMTPA greenfield refinery cum petrochemical complex in Barmer District in Rajasthan, as a Joint Venture (JV) with Government of Rajasthan under the name HPCL-Rajasthan Refinery Limited( HRRL).
The proposed refinery will be a subsidiary of HPCL with its equity of 74% to be held by HPCL and 26% to be held by the Govt. of Rajasthan. The cost of the project is estimated at Rs. 37,230 crore. The project cost is proposed to be sourced with a detbt/equity ratio of 1.5:1. Total equity component is Rs.14,892 crore and debt is Rs.22,338 crore. HPCL's equity contribution is Rs.11,020 crore at 74% equity and Govt. of Rajasthan's equity contribution is Rs.3,872 crore at 26%.
HPCL has signed a Memorandum of Understanding on 14th May, 2013 with Govt. of Rajasthan in this regard. HPCL has subsequently also signed a JV agreement with Govt. of Rajasthan on 11th July, 2013 on these terms for setting up the refinery as a joint venture. The proposed refinery will process 4.5 MMT of Mangala Crude and 4.5 MMT of Arab/other crude(s).
There shall be a direct and indirect economic benefit to the economy of Rajasthan, which shall, besides industrialization, result in substantial increase in income, output, employment and tax earnings of the State.