The Expert Appraisal Committee (EAC) under the Ministry of Environment, Forest and Climate Change (MoEFCC) has finally recommended environmental clearance and Coastal Regulation Zone (CRZ) clearance for the ambitious ₹1.03 trillion greenfield refinery and petrochemical complex being set up by Bharat Petroleum (BPCL) in Nellore district, Andhra Pradesh.
The EAC’s recommendation is generally accepted by the government and leads to the grant of the clearances. This will pave the way for BPCL, the country’s third-largest refiner, to start construction work at the project site near Ramayapatnam Port.
The 9 million tonne per annum (mtpa) project is being set up on 5,200 acres of land with a complex product slate that includes 5.4 million tonnes of transportation fuels like petrol, diesel and ATF, apart from 3.2 million tonnes of petrochemicals.
Apart from its mega production capacity and the investment involved, the project assumes significance because of the planned dedicated zones for green hydrogen, renewables, and a large marine crude oil terminal linked to Ramayapatnam Port, part of a larger plan by the Andhra Pradesh government to turn the state into a regional energy hub.
For BPCL, the commissioning of the project would also mark a further broadening of its product basket in favour of high-margin petrochemicals from the current portfolio dominated by transportation fuels. The refinery will produce petrol, diesel, ATF, naphtha, LPG, bitumen, fuel oil and propylene, while the petrochemical unit would produce polypropylene, polyvinyl chloride (PVC), low-density polyethylene (LDPE), phenol and acetone, among other products.
The public hearing for the project was conducted by the Andhra Pradesh Pollution Control Board in December last year, and Engineers India Ltd (EIL), acting as the consultant for the project, informed the EAC during its meeting last month that no litigation is pending against the proposal.
Of the total 5,200 acres of land required, BPCL will develop 1,563 acres of greenbelt inside the refinery and petrochemical complex, which is 30 per cent of the total project area, according to the details shared by the company with the environment ministry.
BPCL has pegged the estimated project cost at ₹1,03,408 crore and ₹3,022 crore as the capital cost of the Environment Management Plan (EMP). The company has also proposed allocating ₹54 crore towards Corporate Environment Responsibility (CER) for different activities in the surrounding villages.
The project would require total direct employment of 400 people and indirect employment of 13,600 people during the construction period, whereas during the operational phase, it will require direct employment of 1,250 people and indirect employment of 3,750 people.
The company has informed the ministry that there are no national parks, wildlife sanctuaries, biosphere reserves, tiger or elephant reserves, or wildlife corridors within a 10-kilometre distance of the proposed site. However, there are a few reserve forests and protected forests within the 10-kilometre radius.
The total freshwater requirement for the project stands at 225,648 cubic metres per day, which will be met from a desalination plant. The company plans to source 624,000 cubic metres per day of seawater for the desalination plant through two intake pipelines. The project would also require 770 megawatts of power, of which 185 MW will be met through the envisaged captive power plant, while the remaining 585 MW will be sourced from the grid.
BPCL currently operates three refineries — at Mumbai, Kochi and Bina — with a combined capacity of 35.3 million tonnes, along with 0.83 mt of petrochemicals capacity. The company is currently executing the expansion of its Bina refinery by an additional 3.2 mtpa.
The Maharatna PSU has the potential to expand capacity to 45 mtpa with the expansion of the Mumbai and Kochi refineries, it said in an investor presentation, adding that the BPCL board has already approved land procurement and DFR studies for the Andhra refinery and petrochemicals project.
The company is currently working on a broad ₹1.7 trillion capex plan, including committed capex, meaning capex already approved by the board, of ₹1.54 trillion. This includes ₹75,000 crore earmarked for the refineries and petrochemicals business, ₹32,000 crore for the upstream segment and ₹20,000 crore for marketing initiatives.
The ₹75,000 crore capex planned for the refineries and petrochemicals business includes ₹6,000 crore being spent on land and DFR studies for the Andhra project. The company is already spending ₹50,000 crore to set up an ethylene cracker and downstream petrochemical plants at the Bina refinery.
It is also simultaneously spending ₹5,000 crore at the Kochi refinery to set up a polypropylene project and ₹14,000 crore at the Mumbai refinery to set up a Petro Resid Fluidized Catalytic Cracking (PRFCC) unit.
