ADDING CAPACITY: K. K. Acharya (right), Managing Director, Chennai Petroleum Corporation, with N. C. Sridharan, Director (Finance), addressing a press conference in Chennai on Friday.

CHENNAI: Chennai Petroleum Corporation Ltd. (CPCL) has commissioned Engineers India Ltd. (EIL) to carry out process configuration and pre-feasibility studies to set up a 15-million-tonne grassroots refinery-cum-petrochemical complex at Ennore.

CPCL is planning to move the Tamil Nadu Government, seeking allotment of 3,000 acres for the proposed project.

Addressing a press conference here on Friday, K. K. Acharya, Managing Director, said the project would require an investment of Rs. 35,000-40,000 crore. The petrochemical component was added to make the project economically feasible and also to ensure a better return on investment.

N. C. Sridharan, Director (Finance), said given the size of the proposed venture, it had to be done along with one or more equity partners. He said the company would join hands with Indian Oil Corporation (IOC) to implement the project. If needed, CPCL could go in for an additional partner. To a question, he said the project was at an embryonic stage and not come to the approval stage. He expected EIL to submit its report by June-end. Such mega refinery-cum-petrochemical project usually had a debt-equity ratio of 2:1, Mr. Sridharan said.

Dwelling on the company's new project initiatives, Mr. Acharya said the Rs. 3,000-crore resid upgradation project would go on stream in 2010. He also said that CPCL was planning to set up a propylene recovery unit at Manali at a cost of around Rs. 300 crore. A pre-feasibility report was under preparation, he added. "We are also looking for a downstream customer tie-up," the Managing Director said.

The company, he said, was also setting up a windmill power project with a total capacity of 17.6 MW at Palghat pass near Pollachi at a total cost of Rs. 90 crore. Power produced from this unit would be used to meet the energy needs of the desalination plant in Chennai. Four of the 22 windmills would go on stream this month, he said. All the new project initiatives taken up for the next fives years would cost the company around Rs. 6,000 crore.

CPCL has reported a turnover of Rs. 29,349 crore for 2006-07, up from Rs. 25,409 crore in the preceding year. The profit after tax is placed at Rs. 565 crore, up from Rs. 481 crore. The board has recommended a dividend of 120 per cent for 2006-07.