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Joint venture partners to decide on Vizag refinery by year-end

Special Correspondent

NEW DELHI: Oil and gas giant Total of France, India born steel baron L. N. Mittal and state-run Hindustan Petroleum Corporation Limited (HPCL) will take a decision on taking a final plunge to set up the proposed 14 million-tonne refinery-cum-petrochemical plant at Vizag in Andhra Pradesh at a cost of $6 billion.

The project is at pre-feasibility stage and now the next round of discussions would open up. “We will know about the fate of the project if we will move ahead with the project or not,” Total Oil Asia-Pacific Senior Vice-President, Thierry Pflimlin, told newsmen here.

Capacity

The five-way venture includes HPCL, Oil India and Gas Authority of India Limited (GAIL). They had, in October 2007, inked a preliminary memorandum of understanding (MoU) for the project.

The project was originally planned as a 15-million-tonne capacity unit but has now been downgraded to 14 million tonnes.

Pre-feasibility report

The pre-feasibility report that was looking at demand in India and Asia and projected economies would be ready by the end of the third quarter of 2008 after which the Steering Committee of the five partners would meet to decide if the project was to be taken up, he said.

To start with, it would be an export refinery but in the long-term some products would cater to Indian market, he said. If the project goes through, this will be Mr. Mittal’s second refinery venture in India after he picked up 49 per cent stake in HPCL’s refinery at Bhatinda in Punjab that is set for commissioning by early 2012.

Mr. Pflimlin said the pre-feasibility would also factor in the absence of tax breaks in deciding the economies of the project. The government has stated that seven-year income-tax holiday would not be available to refineries commissioned after March 31, 2012.

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