NEW DELHI: Putting the joint venture between Hindustan Petroleum Corporation Limited (HPCL) and the L N Mittal group on the fast track, the Union Petroleum Ministry has sent the Rs. 15,700-crore Bhatinda refinery deal for Cabinet approval.

Termed as the biggest foreign direct investment (FDI) in the petroleum sector, highly placed sources said the Ministry had approved the Cabinet note and now the matter had been sent for Cabinet consideration.

In view of the fast expanding investments in the oil and gas sector and the goal to achieve energy security, the Petroleum Ministry and the United Progressive Alliance Government were of the view that this deal was given a fast approval to send a clear message to foreign and private investors that the Government was serious on doing business, the sources said.

After Cabinet approval, a formal shape would be given to the entire deal for implementation.

According to the joint venture agreement, signed on February 14, the Luxemburg-based Mittal Investments and HPCL would hold 49 per cent stake each in the project and the remaining two per cent would be allocated to financial institutions with the consent of both parties.

The project would be completed in 48 months time and would have capability to process 100 per cent high sculpture and heavy crude thus ensuring attractive terms. The nine million tonnes refinery is likely to be commissioned by 2011. All statutory and regulatory approvals, including environmental clearance, have already been obtained.

An estimated 2,000 acres have been acquired for the refinery and a lease agreement has also been signed for 300 acres with Adani Port Trust for setting up a crude oil terminal at Mundra in Gujarat.

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