The 60-million tonne-a-year refinery will require an investment of .
`1.5 lakh crore, prompting state firms, which usually compete with each other, to join hands. The biggest refinery any state firm has ever built in the country is of 15 million tonne. By bringing together resources and competence, the state firms plan to put their best behind a project that would help meet future fuel demand rapidly rising with the economy.
State-run EIL, which has been appointed as the consultant for the project, may get equity in lieu of consultancy fee, the persons cited earlier said. The Maharashtra government has promised to identify and acquire land quickly for the project and offer it for free.
People aware of the development said the state government will be offered equity stake in the project equivalent to the fair value of the land.
The project will be developed in two phases, with 40-million tonne capacity being completed in the first. A petrochemical unit will also likely be set up along with the refinery, they said.
Since refining is a low-margin business, the refinery complex will have a petrochemical plant, especially since the demand for petrochemical has been rapidly rising, an executive at Indian Oil Corp had said last month.
Indian Oil Corp is the largest refiner in India with an installed capacity of about 80 million tonne per annum. The country has a total capacity of about 230 million tonne, with about 80 million tonne capacity owned by the private sector.
India is a net exporter of petroleum products but rising domestic demand and lower international prices have slowed exports. The export of petroleum products was down 18% in December and 11% during April-December 2015. The domestic consumption of petroleum products grew 9.5% during April-December. At this pace, the country would need a new refinery soon to meet local demand, sources said.