The state government and Amerind Petroleum signed an MoU to set up a petroleum refinery near Visakhapatnam.
The state government and Amerind Petroleum on Thursday signed a Memorandum of Understanding (MoU) to set up a petroleum refinery near Visakhapatnam with an estimated cost of Rs. 11,196 crore.
The MoU was signed in the presence of Chief Minister N Kiran Kumar Reddy at the Secretariat this evening.
Speaking on the occasion, the Chief Minister thanked Amerind Petroleum Corporation for locating the refinery in Andhra Pradesh, and assured them that the state government would try its best to help the company start its operations immediately. He hoped that this becomes the best petroleum refinery in the country. The CM said that Andhra Pradesh has many advantages, including a long coastline and natural resources, and that the government provides good infrastructural facilities.
Major Industries Minister Dr. J Geetha Reddy also claimed that the state has the best industrial policy in the country. She hoped that after Amerind Refinery, many more companies would come forward to establish their units.
Amerind Petroleum Private Limited (Amerind), in joint technical collaboration with the American Industrial Corporation (AIC), is proposing to establish a petroleum refinery, with an initial refining capacity to process 7.50 million tonnes of Crude oil per annum (1,50,000 barrels per day). It will produce the entire range of petroleum products, meeting EURO-IV standards and complying with environmental and pollution control norms as per Indian and international standards.
The refinery will be located in the PCPIR Industrial Zone near Visakhapatnam.
In the first phase, the project is being set up on a turnkey basis, by AIC, the American Technical Collaborator, by relocating an existing and running refinery acquired by AIC in the USA at a low project cost, estimated at Rs. 2,525 crores, (US $505 million ).
In its second phase, the project will be expanded to a total refining capacity of 15 million tons per annum, along with a petro chemicals complex, at an additional estimated project cost of Rs. 8,611 crores.
The refinery will be the first private sector unit in the state. It will have its own Captive Floating Marine Terminal and 3 under-water pipelines, to receive the imported crude oil, and to dispatch products for exports. The refinery will have a railway siding, and will be connected to NH-5.
Amerind Petroleum Private Limited has been promoted by Syed Badruddin, who hails from a well-known aristocratic family of Hyderabad and is a technocrat with 36 years of experience in manufacturing industries in Andhra Pradesh.
He is a chief promoter and the chairman of the company, and the project is being set up with financial assistance from the Exim Bank of USA.
According to a CMO release, Amerind Petroleum Private Limited is registered under the Indian Companies Act-1956, in Andhra Pradesh, and proposes to manufacture products like Motor Spirit (Petrol), High Speed Diesel (HSD), Light Diesel Oil (LDO), Aviation Turbine Fuel (ATF), Liquified Petroleum Gas (LPG) and Heavy Fuel Oil (HFO).
The American Industrial Corporation has a consortium of 14 US companies, with experience and expertise of over 25 to 30 years in the petroleum industry. AIC's turnkey contract with Amerind Petroleum Private Limited (India) includes acquisition, relocation, technical designs and engineering services, installation in India and startup.
American Industrial Corporation said that it received a Letter Of Interest / Approval from EXIM Bank for the project on 24 June this year for a direct loan funding of US $375 million for the US costs of the project plus upto 30% of this for the local costs in India.
The project funding comprises loan funding of US $404 million, and equity of US $101 million. The company proposes to go in for an IPO in India after the commencement of the commercial production.
The refinery will contribute over Rs. 15,544 crores, annually, by way of import duty, excise, state sales tax and state surcharge to the government of India and the state government. Out of this, the sales tax and the state surcharge payable to the state government works out to more than Rs. 7,122 Crores annually.
There are also plans to set up 3,500 retail outlets to market the company's products, over a period of 3 to 5 years. Direct employment to around skilled, semi-skilled and un-skilled 55,000 persons will be provided in the refinery, material handling and transportation department, and in the retail outlets (petrol/gas stations).
Initially, Amerind will market its products through a tie-up with the oil marketing companies of India.
Treating the proposed refinery as a mega project, the state government is considering a special package of incentives as per IIPP-2010-15, industrial clearances and approvals through Single Window Clearance, to help the company in the initial tie-up with the public sector oil companies, (OMCs) IOCL and BPCL and procuring land for the project through APIIC in the PCPIR Region. (INN)