Assam refinery to see 200% capacity expansion

Government of India said that annual capacity at the Numaligarh Refinery will be raised to 9 million tonnes from 3 million tonnes currently to better cater to the northeastern markets

January 16, 2019

India’s Northeast region comprises of eight Indian states - Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura

PM Modi has stressed that India's growth would be energised through fast-paced growth of the Northeast region that shares long international border

An oil pipeline will be set up linking the port town of Paradip with the Numaligarh refinery, along with a product pipeline linking the refinery with Siliguri

The US$3.2 billion project is to be completed over next four years; A part of Hydrocarbon Vision 2030 for the northeast, it will generate new employment

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval to boost capacity at an oil refinery in the state of Assam by 200 per cent. The plan will see annual capacity at Numaligarh refinery rise to 9 million tonnes from 3 million tonnes. This will help better supply the growing fuel markets in northeastern India. As part of the plan, a crude oil pipeline will be set up connecting the seaport town of Paradip in Odisha with the Numaligarh refinery, along with a product pipeline linking the refinery with Siliguri in West Bengal. The US$3.2 billion project is expected to be completed over the next four years.

The total project cost will be financed by a mix of debt, equity and viability gap funding (VGF). The debt of US$2.1 billion will be raised by Numaligarh Refinery and apart from its internal accrual of US$322 million, the promoters, namely, Bharat Petroleum Corporation, Oil India and Government of Assam will contribute to equity. The project will be supported by Viability Gap Funding of US$140 million from the Central Government. The expansion of the refinery will meet the deficit of petroleum products in eight northeastern states. This will sustain the operations of all northeast refineries by augmenting their crude availability for the rising local demand.

The project, a part of the Hydrocarbon Vision 2030 for the northeast, will generate direct and indirect employment in Assam. India’s northeastern states are witnessing a sea change in terms of overall development as part of a plan to make the region the fulcrum for the country’s outreach to the Association of Southeast Asian Nations (ASEAN). For the Government, bolstering economic development in the region is key to its Act East policy under which it is seeking to boost culturala and trade relations with east Asia and the ASEAN countries. Infrastructure, connectivity and industrial projects worth over US$48 billion have been announced for the northeast.