JAIPUR: The Oil and Natural Gas Corporation Ltd. and Cairns Energy will jointly set up a 7.5 million tones capacity per annum well head oil refinery in Barmer district of Rajasthan to make use of the new found oil in the area. A new company, Rajasthan Refineries Limited, with equal participation from ONGC and Cairns Energy, will be set up for the venture.

ONGC Chairman and Managing Director Subir Raha announced here that the oil refinery, proposed at a cost of Rs.9,000 crores, would be the single biggest investment in Rajasthan so far. "It is an unprecedented opportunity for the State to have a refinery,'' said Mr. Raha, who was here for the signing of an agreement between ONGC and the Rajasthan Government on the supply of gas to the proposed power plant at Dholpur.

The crude from the new wells has been allotted to a joint venture of ONGC and Mangalore Refineries and Petrochemicals Limited for processing. ONGC has a 30 per cent share in the recently discovered oil in Barmer. "Five million tones crude will be sourced from the local wells while the rest would come from off shore wells and other sources. The refinery will operate even if the availability of local crude declines," Mr. Raha said. Meanwhile, ONGC would be on the look out for more reserves in the area.

"ONGC is getting good response from the State Government. We expect early implementation of the project," Mr. Raha said. The ONGC officials and functionaries of the State Government on Monday held a discussion over the probable spots for locating the refinery, which needs an area of 2000 acres. MRPL would buy the refined crude. Pipelines would be laid for the transport of oil, he said.

The refinery would require assured supply of water and clearances on environment and other aspects before the work on it starts sometime in 2006.

Rajasthan Chief Minister Vasundhara Raje said the State Government would invest about Rs.100 crore in the oil refinery to become a partner in the project with ONGC. "I am happy to welcome MRPL to the venture," she said pointing out that the refinery would bring many more investments to western Rajasthan. "A lot of investors would like to come to Jaisalmer and Barmer now. This would not only bring in economic development but also strengthen social infrastructure in the desert area,'' she noted.

The ONGC chief on the occasion announced the discovery of rich gas in Chiniwala Tiba of Jaisalmer district. "This is the first discovery of rich gas in the area. The earlier discoveries were of thin gas. Availability of rich gas will give a new dimension to investments in Rajasthan," Mr. Raha said.

By the end of the year ONGC would start drilling for oil exploration in Myanjalar area of Jaisalmer, Mr. Raha informed. He also spoke of the MoU signed between ONGC and Neyveli Lignite Corporation for the underground gasification of lignite deposits in Rajasthan.

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