Mittal confirms association in US$4 bln Bhatinda project with HPCL

03-Jun-09

Steel magnate Lakshmi N Mittal’s group has confirmed interest in the US$4 bln Bhatinda oil refinery project in partnership with Hindustan Petroleum Corporation Ltd (HPCL). The 9 mln tpa refinery is being implemented by HPCL-Mittal Energy (HMEL), an equal joint venture (JV) between Mittal Energy Investment, Singapore and state-owned HPCL. While Mittal and HPCL hold 49% stake each in the JV, the balance 2% stake is held by financial institutions. The Mittal group had infused foreign equity of Rs 500 crore and has invested additional Rs 375 crore as part of its equity share in the joint venture. Earlier this month, it was supposed that the group could consider an exit from the project if adequate compensations were not offered in response to a letter to the Prime Minister that seeks more fiscal incentives to make the refinery viable. The group had sought incentives worth Rs 30,000 crore in total. At that point of time, it was not possible to extend fiscal incentives to the project due to the election code of conduct. Since this is a prestigious project for Punjab, the government is planning to re-examine the package and explore possibilities of increasing the sops.