Lok Sabha Question No. 3114 (UNSTARRED), answered on 2018-08-06
Subject: Setting up of Oil Refinery
Ministry: PETROLEUM AND NATURAL GAS
Asked by: RAYAPATI SAMBASIVA RAO, RENUKA BUTTA, JAYADEV GALLA

## LOK SABHA UNSTARRED QUESTION NO. 3114 th

## TO BE ANSWERED ON 06 AUGUST, 2018

## Setting up of Oil Refinery

3114. SHRI RAYAPATI SAMBASIVA RAO : SHRIMATI BUTTA RENUKA: SHRI JAYADEV GALLA:

## पैट्रोल ियम और प्राक ृ तिक गैस मंत्री

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Andhra Pradesh Reorganization Act, 2014 proposes Green field crude oil refinery and Petrochemical Complex at Visakhapatnam and the said act also proposed that IOCL and HPCL would examine the feasibility within six months from appointed day and if so, the details thereof and the current status of the project;
- (b) whether the economic feasibility for the said project is not being considered as its economic benefits will only help in strengthening of the bifurcated States and if so, the details thereof;
- (c)  whether  different  approaches  are  adopted  for  central  financing  of  both  PSU-led projects i.e Assam Gas Cracker and IOCL Visakhapatnam refinery and if so, the details thereof and the reasons therefor;
- (d)  whether  HPCL  and  GAIL  have  entered  into  an  agreement  with  Government  of Andhra Pradesh to set up a petrochemical plant in the State and if so, the details of the said agreement and the employment likely to be generated after setting up of the said plant and the time by which the plant would be completed; and
- (e) whether Viability Gap Funding (VGF) was taken from any other State earlier and if so the details thereof along with the reasons for asking/seeking VGF for Andhra Pradesh?

## ANSWER पैट्रोलियम और प्राक ृ लिक गैस मंत्री (श्री धमेन्द्र प्रधान)

## MINISTER OF PETROELUM & NATURAL GAS (SHRI DHARMENDRA PRADHAN)

(a)  As per Andhra Pradesh  Reorganization Act, 2014, 'IOCL or HPCL shall, within six months from appointed day, examine the feasibility of establishing a green field crude oil refinery and petrochemical complex in the successor state of Andhra Pradesh and take an expeditious decision there on'. (b) The economic feasibility of Andhra Pradesh Petrochemical Complex at Kakinada has been carried out by Hindustan Petroleum Corporation Limited (HPCL)  and Gail (India) Limited (GAIL). Oil PSUs have indicated to the Government of Andhra Pradesh (GoAP) that Viability Gap Funding (VGF)  is necessary to make the project viable. (c)  Assam Gas Cracker Project (AGCP) was initiated in pursuance of the Memorandum of  Settlement signed between Central Government, All Assam Students Union and  All Assam Gana Sangram Parishad on 15.08.1985. The objective of the project was overall socio-economic  development  of  the  North  Eastern  Region.  A  Joint  Venture  company namely M/s Brahmaputra Cracker and Polymer Limited (BCPL), a CPSU  under administrative   control  of  Department  of  Chemicals  and  Petrochemicals  implemented the project. Based on the Government's approval given from time to time, its project cost is Rs. 9965 crore which includes a Capital Subsidy of Rs. 5239.45 crore. (d) GoAP, GAIL and HPCL have signed a MoU on 27 th January, 2017  for setting up of a Greenfield Standalone Petrochemical Complex in Kakinada with capacity of approximately 1 MMTPA Ethylene with an estimated cost of Rs. 32901 crore. Detailed Feasibility Study and Financial Appraisal Study have been completed. The project  period is 4 years from zero date and is direct employment potential is around 1000 people.

(e)  Refinery  Projects  like  Paradip  Refinery  Project,  HMEL,  Bhatinda  have  been  set  up with VGF provided by the concerned State Governments. Recently, HPCL has signed a MoU  with  Government  of  Rajasthan  in  April,  2017  for  setting  up  a  Refinery-cumPetrochemical  Complex  in  Barmer  District  of  Rajasthan  with  an  estimated  cost  of Rs.43129 crore, wherein it has been agreed by Government of Rajasthan to provide VGF @ Rs. 1123 crore per year for 15 years as interest free loan to HPCL.

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