The Union Cabinet on Friday approved setting up of HPCL's Rs 37,229 crore (Rs 372.29 billion) refinery-cum-petrochemical complex in Rajasthan, just ahead of the planned foundation stone laying of the project by United Progressive Alliance Chairperson Sonia Gandhi.
Gandhi is scheduled to lay foundation stone of Hindustan Petroleum Corp Ltd's 9 million tonnes refinery at Pachpadra in Barmer district of Rajasthan on Sunday.
The Cabinet Committee on Economic Affairs at its meeting this morning approved the project, official sources said.
HPCL is to hold up to 74 per cent stake in the project, while the balance 26 per cent will be with Rajasthan government.
Sources said the function at Pachpadra will also be attended by Rajasthan Chief Minister Ashok Gehlot and Oil Minister M Veerappa Moily.
Rajasthan government has also agreed to provide interest free loan of Rs 3,736 crore (Rs 37.36 billion) every year for 15 years from the date of commencement of production.
The same is to be repaid by the joint venture in equal annual installments from 16th years after commercial production commences for the next 15 years.
Sources said HPCL will have the marketing rights, including first right of refusal in respect of uplifting and purchase of all products (including petrochemials), which would be produced by the refinery.
The refinery, which is planned to go on stream in four years, will source half its crude oil from Cairn's Barmer oilfields, while the remainder will be imported.
Besides petrol, diesel and LPG, the project will also produce 2.3 MT of petrochemical products such as polypropylene, polyethylene and aromatics which are used for making plastic.