Kakinada project in doubt

Will ONGC abide by the findings of a pre-feasibility study which questions the commercial viability of its refinery project at Kakinada in Andhra Pradesh?

The project comprises a 15m tonnes/year refinery and a 400,000 tonnes/year polypropylene (PP) facility.

The study shows that the project faces poor profitability unless it receives heavy fiscal benefits. This is not the first time that ONGC has faced this hurdle. An earlier study had raised similar questions on a refinery in Barmer, Rajasthan.

India has too many refinery projects on hand and most of these are targeting the export market.

Deutsche Bank estimates that India is likely to boost its refining capacity by 45% (63.5m tonnes/year) from 146m tonnes/year over the next five years.

Besides the Kakinada project, Andhra Pradesh has one more refinery lined up – this one by HPCL.

With the Kakinanda refinery in doubt, the petroleum, chemicals and petrochemicals investment region (PCPIR) planned at the site may have to be scrapped. At this rate, will India ever have a PCPIR?

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3 Responses to Kakinada project in doubt

  1. abc 30 August, 2007 at 9:18 am #

    I think story is without the latest info. The state government has already announced a plan to set up a PCPIR on the Kakinada-Vizag Coastal Corridor. HPCL is setting up new refinery adjacent to the existing one. ONGC has a plan to increase the capacity at Tatipaka. Mittal is keen have a stake in the HPCL refinery after Bathinda One.
    Underground LPG cavern is almost completed and a strategic oil reserve is to be set up. Which area has (close one is Dahej) is more suitable for the PCPIR than the east corridor

  2. narayan 12 September, 2007 at 10:50 pm #

    hi,
    This is narayan software engineer from ireland , dublin city , to setup a refinery by ongc is really worthy , because kakinada is a one of the fastest growing cities in india,know india is having a great boom in world, as per my thought is concerned to setup a refinery is a good thing for organisation.

  3. Rahul 1 November, 2007 at 6:59 am #

    This is Rahul From Pune, India Chemical Engineer. The proposed project by ONGC is Good one. It will give opportunities to local Area personnel.

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