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NRI Mittal, steel tycoon sign MoU with HPCL for Bhatinda, Punjab refinery

New Delhi, March 25, 2007
Doordarshan News
National Informatics Centre (NIC), DIT, MoCIT,
Government of India

UK NRI, Steel baron L N Mittal has formally signed an MoU with HPCL to become an equal partner in the latter's Rs 16,000 crore Bhatinda refinery, infusing Rs 3,300 crore in the venture. 

Diving further into the Indian oil sector, President and CEO of the world's largest steel company Arcelor-Mittal will now hold a 49 per cent stake in the Special Purpose Vehicle for building the plant and laying a 1,100 km pipeline for wheeling crude from Mundra port.

A tie-up with HPCL brings refinery expertise and could open doors for Mittal's oil trading plans, according to industry experts with HPCL emerging as the preferred partner for getting into refining and gas business globally.

The Guru Gobind Singh Refinery project in Bhatinda, the agreement for which was signed in Delhi on Saturday, will be completed by September 2010.

''This will be the first 49 per cent FDI in Indian refining industry and marks world investor confidence in the sector,'' Petroleum Secretary M S Srinivasan said earlier this month.

The deal with HPCL has been done through Mittal Investments, a 100 per cent subsidiary held by Mittal family.

Mittal Investments has promoted Mittal Steel company where they hold 38 per cent stake.

The remaining 49 per cent equity in the nine million metric tonnes per annum (MMTPA) refinery will be held by HPCL while two per cent of the project will be held by financial institutions.

The investment comes a year after European oil major BP pulled out saying the project was unviable.

The new refinery at Bhatinda will have a capacity of 1,80,000 barrels a day and is scheduled to be commissioned in 2010-11.



 

 

 

 

 
  • Mittal has decided to invest over Rs 3,000 crore (Rs 30 billion) as foreign direct investment in the Bhatinda refinery. He will also be a partner in the 1,100-km pipeline being laid by HPCL to transport crude from Mundra port in Gujarat to the refinery.