Barmer refinery installation work, a Congressional government dream project in Rajasthan, resumes

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The Barmer refinery and petrochemicals project, a Rs 44,000 crore oil refinery, which is a Congressional government dream project, has started rolling after suffering several hiccups. The refinery will be located in the village of Pachpadra in the border district of Barmer.

Work at the refinery had suffered a setback due to the coronavirus pandemic, but they have now ramped up with the joint venture starting various processes to get it in place.

The project is the first of its kind in Rajasthan and is being developed by a joint venture (JV) between Hindustan Petroleum Corporation Limited (HPCL, 74%) and the participation of the government of Rajasthan (26%). It will be known as HPCL Rajasthan Refinery Limited (HRRL).

The new refinery and oil complex will have a total processing capacity of nine million metric tons per year (MMtpa). It will be used for the production of BS-VI grade motor gasoline and diesel fuel, as well as other products including ethylene and propylene derivatives. The derivatives will be used as a raw material in industries such as textiles, packaging and petroleum. It is expected that with the available derivatives, this will lead to the establishment of more industrial units and thousands of job opportunities.

The project received environmental clearance in September 2017 and final approval from the Indian government in October 2017. Construction of the project began in January 2018 and is expected to be completed by 2022.

“The development is estimated at $ 6.8 billion and will create approximately 1,500 direct jobs when completed, as well as up to 40,000 indirect jobs during construction. It should also contribute to the economic development of Rajasthan and help the development of downstream petrochemical companies, ”said Mukesh Kumar Surana, President of HPCL.

The refinery and petrochemical complex will be built on 4,813 acres of land approximately 5 km from the village of Pachpadra in the Barmer district. It will be located 100 km from Jodhpur Airport and will benefit from connections to the NH-112 national road.

The proposed facility will consist of a total of 29 processing units, including a 9 MMtpa crude distillation unit, a 4.8 MMtpa vacuum distillation unit and a 1.8 MMtpa hydrotreating unit.

It will also include a diesel hydrotreatment unit with a capacity of 4.1 MMtpa, a vacuum diesel treatment hydro-processor with a capacity of 3.5 MMtpa and a petrofluid catalytic cracking unit with a capacity of of 2.9 MMtpa.

The other units will include an isomerization unit with a capacity of 0.26 MMtpa, a double-feed cracking unit with a capacity of 82,000 tpa, an ethylene recovery unit with a capacity of 77,000 tpa , two units of polyethylene with a capacity of 0.416 MMtpa and two units of polypropylene units with a capacity of 0.49 MMtpa. The polypropylene units will include Lummus’ NOVOLEN process reactors and the NHP catalyst.

The Barmer refinery is expected to process 1.5 MMtpa of locally produced crude in Rajasthan on the Mangala fields, 7.5 MMtpa of Arab and other crude, as well as natural gas during its first eight years of operation. It will also process 9 MMtpa of mixed Arab crude, as well as natural gas, after its eighth year of operation.

The refinery and petrochemical complex will consist of various common utility units and systems, such as a benzene recovery unit, a hydrogen generation unit, an amine regeneration unit, an acid water stripping unit, and an acid water stripping unit. sulfur recovery.

Additional utilities will include internal fuel oil and gas systems, a compressed air and nitrogen plant, a condensate system, a raw water and cooling water system, and an oil treatment system. boiled feed water.

The facility will feature various technologies in multiple units, including a naphtha hydrotreatment unit and a semi-regenerative reformer.

It will be powered by a captive on-site power plant consisting of four gas turbine generators of 33 megawatts (MW) each and five steam turbine generators of 26 MW. Water for the refinery will come from the Indira Gandhi canal via pipes already laid.

The refinery will also include off-site facilities for the storage of crude oil, intermediate products and finished products.

The refinery project suffered many setbacks with the change of state government. In March 2013, while there was a Congressional government led by Ashok Gehlot as chief minister, a Memorandum of Understanding (MoU) for the development of the Barmer refinery was initially signed by HPCL and the government. of Rajasthan with an investment of Rs 372.3 billion. ($ 5.74 billion).

HPCL and the Government of Rajasthan also signed a Joint Venture Agreement (JV) in July 2013 to implement the project through the HPCL Rajasthan Refinery Limited (HRRL) Joint Venture.

The project was initially approved by the Indian government in September 2013. The state government initially agreed to grant the joint venture an interest-free loan of 3.73 billion rupees ($ 575.93 million) per year. for a period of 15 years.

However, the new BJP government headed by Vasundhara Raje objected to the terms of the agreement regarding the government allocated stake and revised the agreement in July 2014. The BJP government said the project was extremely expensive and that the cost factor should be reviewed.

A new joint venture agreement was then signed by the government and HPCL in August 2017 to develop the project with an investment of Rs 431.29 billion ($ 6.8 billion).

The government of Rajasthan will provide an interest-free loan of 11.23 billion rupees ($ 177 million) per year for 15 years under the new agreement. The state will receive a 12 percent return on investment from the refinery project.

HPCL entered into a debt syndication agreement with a consortium led by the State Bank of India (SBI) for a loan of 287.53 billion rupees ($ 4.05 billion) for the project, in January 2019. agreement marked the financial close of the refinery and petrochemicals project.

Axens Technologies won a contract to provide advanced technologies for the installation in April 2019. The contract includes the supply of proprietary equipment, catalysts and adsorbents.

McDermott International won a contract for the basic engineering design of two polypropylene plants. Engineers India Limited (EIL) has been awarded a 50 billion rupee ($ 689.24 million) contract to execute the refinery project.

HRRL awarded the contract for setting up the dual feed cracking unit worth Rs 7000 crore to L&T Hydrocarbon Engineering (LTHE). There was fierce competition with international companies also bidding, but ultimately the Indian company won the contract on merit. L&T Hydrocarbons is a 100% subsidiary of the Larsen & Toubro group based in Mumbai.

L&T was awarded the contract after financial offers submitted by two bidders (Petrofac and L&T Heavy Engineering) for the Petro FCC Package (EPCC-03) and three bidders (Tecnimont + JGC, Petrofac and LTHE) for the DFCU Package (EPCC-07) ) in December 2020 were opened. Petrofac’s offer was disqualified for both packages, another source said.

The scope briefly involves the engineering, procurement and construction of two critical process blocks of an integrated 9.0 MMTPA refinery and petrochemical complex. The licensor for both blocks is Technip FMC and the project management consultant is Engineers India Ltd.


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