A proposed crude oil refinery project in Nagapattinam district is facing fresh uncertainty, as a similar-capacity refinery is being taken up in neighbouring Andhra Pradesh, raising questions over the need for two public-sector projects in the same southern market.
Chennai Petroleum Corporation Ltd (CPCL), a subsidiary of Indian Oil Corporation, currently operates a refinery complex at Manali in Tiruvallur district with an annual capacity of 10.5 million tonnes. The fuels produced there meet demand across Tamil Nadu and other southern states.
CPCL has announced a new refinery at Panangudi in Nagapattinam under the name “Cauvery Basin Refinery”, with a planned capacity of 9 million tonnes per annum and an estimated project cost of ₹33,023 crore.
However, Bharat Petroleum Corporation Ltd (BPCL) is implementing a 9 MTPA refinery near Ramayapatnam port in Nellore district of Andhra Pradesh with an investment of ₹1 lakh crore. The output from that facility is also expected to be sold in Tamil Nadu and other southern states.
With both CPCL and BPCL being public-sector oil companies, the Petroleum Ministry is said to view two parallel refineries in adjacent states as unnecessary, putting the Nagapattinam plan in question. The report adds that the land acquired for the project in Nagapattinam could instead be used for a petroleum-products manufacturing unit.
