NEW DELHI, Jan 16 - The Union Cabinet on Wednesday sanctioned a project for capacity expansion of Numaligarh Refinery Limited from 3 MMTPA (Million Metric Tonne Per Annum) to 9 MMTPA.
The Cabinet Committee on Economic Affairs (CCEA) meeting chaired by the Prime Minister Narendra Modi today approved the project.
Official sources said that the project involves setting up of crude oil pipeline from Paradip to Numaligarh and product pipeline from Numaligarh to Siliguri at a cost of Rs 22,594 crore. The project is to be completed within a period of 48 months, after approval and receipt of statutory clearances.
The total project cost of Rs. 22,594 crore will be financed by a mix of debt, equity and Viability Gap Funding (VGF). The debt of Rs 15,102 crore will be raised by NRL and apart from its internal accrual of Rs 2,307 crore, the promoters, including Bharat Petroleum Corporation Limited, Oil India Limited and Government of Assam (GoA) will contribute to equity. The project will be supported by Viability Gap Funding of Rs 1,020 crore from the Government of India.
The expansion of the refinery will meet the deficit of petroleum products in the North-East. It will also sustain the operations of all North East refineries by augmenting their crude availability. It will generate direct and indirect employment in Assam and is a part of the Government�s Hydrocarbon Vision 2030 for the North East, official sources said.
According to sources, weakness of the NRL is its sub-economic refinery size at 3 million MMTPA, the report says. Coupled with this, the logistical bottlenecks for importing limited quantity of crude oil to saturate existing refining capacity results in relatively higher operating cost per unit of crude processed.
The NRL has reported the outlook for 2018-19 continues to be positive with growing demand of petroleum products in the NRL�s supply zone. Consumption of petroleum products in the North-East has seen a high growth rate of around 16 per cent for motor spirit and 9 per cent for high-speed diesel.
