IOC & CPCL begin work on ~31,580-cr TN refinery project
State-run Indian Oil Corporation (IOC) and its subsidiary Chennai Petroleum Corporation (CPCL) have started activities for the ~31,580-crore refinery project at Nagapattinam in Tamil Nadu.
While both the companies will hold 25 per cent each in the proposed 9 million tonne per annum (mtpa) refinery, the remaining 50 per cent will be held by a strategic or financial partner, for which talks are already on. The companies have appointed SBI Capital Markets, a subsidiary of State Bank of India, for financial advisory, debt and quasi-equity syndication services for the greenfield project.
SBI Caps will assist in the identification of seed investors and also invest in equity or quasi-equity to the extent of ~5,000 crore and arranging debt to the tune of ~20,000 crore for this project, CPCL said. The financial closure of the project is expected to be achieved within six months. The project is expected to be complete between 45-50 months once the work starts.
CPCL has also roped in consultants like Engineers India (EIL), Mcdermott, and Tata Consulting Engineers (TCE) and has reportedly signed contracts worth around ~1,500 crore. This comes close on the heels of Tamil Nadu Chief Minister M K Stalin handing over the order of acquisition of land for the project on September 3.
“The active support of the Tamil Nadu government is also received by way of approval of the land acquisitions to the extent of about 658 acres and release of the requisite Government Gazette Notifications,” said a CPCL statement.
The project is expected to supply motor spirit and highspeed diesel to the hinterlands of Tamil Nadu and adjoining areas and has export potential with a mix of petrochemical products like polypropylene.
“The funding activity, coupled with the project activities to be on stream according to the schedule, will foster development to the district and the state as well. This project will be a feather in the cap of the industrial map of Tamil Nadu and IOCL group,” the statement added.