SINGAPORE: Oil trader Trafigura will invest up to $250 million in a refinery and oil storage project in India’s southern state of Tamil Nadu, the company said in a statement on Thursday.
The investment will include an equity stake in the Nagarjuna Oil Corporation Limited ( NOCL) oil refinery worth $130 million with the remaining investment being used to develop storage facilities.
“India is fast emerging as a leading hub for oil refining, with domestic demand rising and an increasing trend towards cleaner refined products,” said Trafigura’s Jonathan Pegler, director of Oil Asia Pacific.
Work on the construction of the refinery, with an estimated capacity of about 121,000 barrels per day (bpd), and site development is expected to start this year, with commercial operations slated to kick-off in the first half of 2013.
The new refinery and storage project will be located on the east coast of India, and will be able to receive supertankers, which typically can load up to 2 million barrels of oil.
The refinery, which will be processing mainly heavy sour crudes, will be gearing up to produce distillates like gasoline, and gas oil in line with Euro IV standards.
Other project partners includes TIDCO, a government of Tamil Nadu entity, and Tata Petrodyne, a subsidiary of Tata Group, the statement said.
“It also has the support of the Tamil Nadu State Government, which is committed to developing the region’s petrochemical infrastructure. Once fully operational, the refinery will greatly improve the supply of oil products to local retailers,” Pegler said.