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Hindustan Petroleum Corporation Ltd (HPCL) is set to revive its plan to set up an integrated mega refinery near Visakhapatnam. The company has approached the Andhra Pradesh government for allotment of about 1,500 acres at Achyutapuram near Vizag for this.

The land the state-owned company is keen on falls under a special economic zone and the state is yet to take a final decision on that.

According to state government sources, HPCL is keen on setting up a mega refinery, an aromatic plant and a naphtha unit in its proposed project with an estimated outlay of Rs 35,000 crore.

The refiner had come up with a similar proposal in 2006 and was allotted the required land by the government. However, it had deferred its plan and the land was also taken back by the government.

"The proposal is still at an early stage. They (the HPCL officials) have met state government officials and conveyed their interest in going ahead with the project this time. However, land allotment is an issue this time since significant part of the SEZ land has already been allotted. Anyway, the state government has asked HPCL to come back with a detailed report on the project," a government source said.

HPCL already has a refinery near Vizag with a capacity of about 8.3mmtpa. The Vizag refinery is the largest in terms of capacity while the other refinery is in Mumbai with a capacity fo about 6.5 mmtpa. According to sources, HPCL was also keen on roping in a partner for the proposed second project at Vizag. However, it could not find a suitable partner.

"The issue of incentives has also come up during the recent meeting. The state has a policy for each of the sectors and the incentives would be passed on accordingly," the source said.

In fact, the state government is this time confident of HPCL grounding its project while not insisting on a particular set of incentives since it is believed that the oil company had earlier gone to other states after deferring its Vizag plans and could not find a suitable location.

"It will be a prestigious project and the government too is keen on accommodating the project near Vizag. However, there is a lot of procedure to follow before confirming the arrival of the project," the source said.

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