HPCL-Mittal may export oil to Pakistan from Bathinda
HPCL-Mittal Energy (HEML) plans to export fuel from its upcoming 9-million tonne oil refinery in Punjab to Pakistan as the domestic market is nearly saturated.
HMEL will find the market crowded by the time it is commissioned in 2011. Fuel demand in north Indian states is largely met by Indian Oil Corporation’s 8.5-million tonne refinery at Mathura and the 12-million tonne refinery at Panipat. IOC is increasing the capacity of Panipat refinery to 15 million tonne by September 2010.
“It makes business sense but it is also politically sensitive,” a minister in the government said requesting anonymity. It will be economical for Bathinda refinery to export its products to Pakistan than to explore domestic markets beyond north India.
ArcelorMittal Group management board member Sudhir Maheshwari said the company is still at an early stage of exploring various markets. “Pakistan is a natural export market given the proximity to the refinery,” he said in an email response. Mr Maheshwari is also in the board of HMEL, a joint venture between LN Mittal group and state-run fuel marketing firm HPCL.
About 30,000 workers are working day and night to complete the project as per the schedule. “We are now in the last 12 months of the construction phase,” a HMEL official said.
The foundation for the $4-billion Bathinda refinery project was laid long back in 1998 by the then Prime Minister Atal Bihari Vajpayee, but the project couldn’t take off due to lack of interest from investors.
In June 2007, oil minister Murli Deora revived the project by offering a 49% equity stake to LN Mittal group in the project. The state government sweetened the deal by offering tax concessions.
The original promoter Hindustan Petroleum (HPCL) holds an equal stake in the refinery while balance 2% is with domestic financial institutions.