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Hyderabad
State-run energy major Oil and Natural Gas Corporation (ONGC) plans to set up a 15 million tonne refinery near Kakinada town in coastal Andhra Pradesh.

ONGC chairman R.S. Sharma made this announcement at a public gathering here Thursday evening after Chief Minister Y.S. Rajasekhara Reddy lodged a protest over the firm going back on its plans of setting up 7.5 million tonne refinery in the state.

The project is expected to bring an investment of Rs.150 billion to Rs.200 billion in Andhra Pradesh and its foundation stone is likely to be laid in two to three months.

Earlier, Union Minister for Petroleum and Natural Gas Murali Deora assured the chief minister that ONGC would go ahead with the project. He said that in fact, the proposal is to double the planned capacity of the refinery.

Sharma admitted that after the due diligence the ONGC had felt that 7.5 million tonne refinery will not be economically viable. He said that due to the perseverance and efforts of Rajasekhara Reddy, who had taken up the matter with the prime minister, the petroleum and natural gas ministry and the government had a re-look into the issue.

After detailed studies, experts have now advised the ONGC that it should go ahead with a 15 million tonne refinery in Andhra Pradesh. "We have started the diligence studies. After two to three months time when these studies are over, we should be able to take the proposal to our board for a formal announcement," he said. 

IANS | April 5, 2007

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