The cost of the three-fold capacity expansion of Numaligarh Refinery Ltd, the largest refiner in the Northeast, is likely to increase by nearly ₹5,900 crore to around ₹34,000 crore, company officials said.
The company has sent a proposal to the government to enhance the budget to ₹33,901 crore from the existing ₹28,026 crore for the Numaligarh Refinery Expansion Project (NREP), a brownfield initiative, and it is under “active consideration” of the Public Investment Board (PIB), they said.
The capacity expansion project of the refiner, located at Numaligarh in Assam’s Golaghat district, from 3 million metric tonne per annum (MMTPA) to 9 MMTPA, is expected to be completed by December 2026.
“The work on the expansion project is progressing at full swing. We can say that around 85 per cent of the overall work has been completed and we have spent an estimated ₹27,601 crore so far,” a senior NRL official told PTI.
The NREP also includes a 1,635-km crude oil pipeline with 9 MMTPA capacity from Paradip to Numaligarh, a 610-km product pipeline of 5.5 MMTPA from Numaligarh to Siliguri, 10 tanks of 60,000 cubic metres each for the Crude Oil Import Terminal (COIT) at Paradip and three storage tanks each for diesel and petrol at Siliguri Marketing Terminal (SMT).
“The enhanced approved budget for the project was ₹28,026 crore. However, the cost has now been revised upward again to ₹33,901 crore. The proposal to increase the expenditure has been sent to the Union Ministry of Petroleum and Natural Gas (MoPNG) for approval,” the official said.
When contacted, NREP general manager (Project) Pranjal Pathak said the refinery has sent a proposal for budget enhancement, and it is under “active consideration” of the Public Investment Board (PIB).
The NRL, a ‘Navaratna’ entity, had started the NREP in 2019 by announcing the single largest investment of ₹22,594 crore in the Northeast and aimed to complete the works in four years by around 2023.
In November 2021, the NRL had stated that the project cost escalated by ₹5,432 crore to ₹28,026 crore due to the adoption of advanced technology.
Asked about enhancing the budget further, Pathak said, “There are several reasons. Initially, the project got delayed due to COVID-19. Then procurement costs rose because the vendors hiked their rates. The heavy monsoon on this side also escalated the cost.”
He said the work is “going on at full pace presently”, and the enhanced capacity is expected to be ready by December 2026.
The project is being funded through a mix of debt and equity at a 70:30 ratio. It is financed by a consortium of 12 banks, led by the State Bank of India.
After the project is completed, the refinery will be able to produce 1,956 MMTPA motor spirit compared to the existing 384 MMTPA, 5,270 MMTPA high-speed diesel as against the current quantity 1,900 MMTPA, and 560 MMTPA LPG as compared to the current output of 60 MMTPA.
The state-run refinery is also implementing a 360 kilo tonnes per annum (KTPA) polypropylene project at an estimated cost of ₹7,231 crore.
The NRL has prepared a roadmap to attain its net-zero goals by 2038. Taking a step further in this direction and in line with the National Green Hydrogen Mission, the company has initiated steps to set up a green hydrogen plant of 300 kg per hour (18 MW) capacity within the refinery premises.
In NRL, Oil India owns 69.63 per cent stake, while the Assam government and Engineers India hold 26 per cent and 4.37 per cent, respectively.
The present authorised capital of the company is ₹5,000 crore, and its paid-up capital is ₹1,759 crore.
