REC, PFC to Loan Rs. 13,972 Cr. to HPCL Subsidiary, HRRL for Barmer Refinery
REC Ltd. and Power Finance Corporation (PFC) will be lending a total of Rs. 13,972 crore to HPCL Rajasthan Refinery Ltd. (HRRL). This loan has been extended for the development of HRRL’s greenfield refinery & petrochemical complex at Pachpadra in Barmer, Rajasthan.
While PFC will be extending a loan of Rs. 9,187 crore to HRRL, REC Ltd. will lend Rs. 4,785 crore to the company.
HRRL Barmer Refinery: 9 MMTPA Refining, 2.4 MMTPA Petrochem Capacity
HRRL’s Barmer refinery will have a crude refining capacity of 9 Million Metric Tonnes Per Annum (MMTPA), and will focus on the production of BS-VI grade fuels, namely Motor Spirit (petrol) and High-Speed Diesel.
Further, HRRL’s petrochem facility in the complex will churn out over 2.4 MMTPA of petrochemicals. Some of the major products of this facility will be Polypropylene, a key raw material in the plastics industry, Butadiene, which is used majorly in rubber manufacturing for automobile tyres, and Linear Low-Density PolyEthylene (LLDPE) and High-Density PolyEthylene (HDPE). Moreover, Benzene and Toluene, two widely-used solvents in the chemicals industry, will also be produced at Barmer.
Further, scope of this project entails laying of associated pipeline to transport domestic and imported crude oil, water pipeline for the refinery site, captive power plant for the project, and storage facilities for petroleum and refined products.
HRRL’s Barmer Complex to Cost 72,937 Cr., Debt Funding of 48,625 Cr.
As per a PIB release by the Ministry of Power dated 4th July 2023, HRRL’s upcoming 900-acre facility, which is currently under development and is expected to be ready by March 2024, has a total project cost of Rs. 72,937 crore. REC and PFC have extended the aforementioned loan to HRRL under a consortium loan arrangement, under which a total of Rs. 48,625 crore will be procured as debt funding for the Barmer refinery.
HRRL’s Barmer Complex to Reduce India’s Petrochemical Import by 26,000 Cr.
Earlier in February 2023 while talking about HRRL’s Barmer complex, Mr. Hardeep S. Puri, Union Minister of Petroleum and Natural Gas, had said that this project will be a step towards achieving 450 MMTPA crude refining capacity by 2030. As per the Ministry of Petroleum and Natural Gas (MoPNG), currently India’s refining capacity sits at around 248.9 MMTPA.
Mr. Puri said that HRRL’s upcoming Barmer refinery will bring the country closer to becoming self-reliant in terms of petrochemicals. As of now, India’s annual petrochemical import bill amounts to about Rs. 95,000 crore, and HRRL’s aforementioned project is expected to reduce this by Rs. 26,000 crore.
About HPCL Rajasthan Refinery Ltd.: HRRL was incorporated in September 2013 as a joint venture between Hindustan Petroleum Corporation Ltd. and the Rajasthan government. While the former owns 74% equity stake in the JV, Government of Rajasthan owns the remaining 26%. HRRL’s project was initially approved in 2013, however, it was reconfigured in 2018, post which work commenced on the Barmer refinery.