A Second refinery to come up in Tamil Nadu

Chennai Petroleum Corporation, Indian Oil Corporation and their seed equity partners have signed a Joint Venture agreement for the proposed Nine Million ton processing capacity grass root refinery and petrochemicals project at Nagapattinam in Central Tamil Nadu coast.

 Nagapatinam being a Port town, a jetty would be constructed to receive crude.

The refinery complex will be built at a cost of Rs 31,580 crore and will cater to the demand for petroleum products in South India.

Indian Oil and Chennai Petroleum will together hold 50 percent stake in the company and the rest would be held by financial and strategic investors. Indian Oil & Chennai Petroleum are classified as promoters of this complex. The overall capacity of the refinery will be 9 Million Metric Tons Per Annum (MMTPA). The refinery will produce petroleum products including MS (petrol), HSD (diesel) and LPG, among others. The refinery’s product line will also include petrochemical products such as polypropylen

The refinery project has been under the proposal stage for over fifteen years. Nagapatinam had a mini refinery with a capacity to process one million ton with the available crude in the region. But the refinery has been dismantled to pave the way for setting up the nine million ton full-fledged refinery. It is the second refinery to come up in the Tamil Nadu coast the first one was set up way back in 1965 in Chennai called the Madras refinery with a capacity to process 12 million tons of crude.

 ICICI Bank and Axis Bank together will own 10 percent of the total paid-up capital in the joint venture. Both banks will acquire 5,000 equity shares of the target entity which will have a face value of Rs 10 each. HDFC Life will subscribe to 11 percent of the total-paid up capital of the new entity, subscribing to 5,500 equity shares of face value Rs 10 each. This will be completed within six months from the date of the Joint Venture Agreement.

SBI Life will also own 10 percent stake in the target entity by subscription to 5,000 shares with a face value of Rs 10. Shares of Chennai Petroleum are trading 1.1 percent higher at Rs 201.75.