The Expert Appraisal Committee (EAC) under the Ministry of Environment, Forest and Climate Change (MoEFCC) has given a positive recommendation for obtaining environmental and Coastal Regulation Zone (CRZ) clearances for a new refinery and petrochemical complex valued at ₹1.03 trillion, which Bharat Petroleum (BPCL) plans to build in Nellore district, Andhra Pradesh.
The EAC's recommendation is typically accepted by the government and leads to the issuance of necessary permits. This paves the way for the state-owned company to commence construction work on the project site, located near the Ramampattnam port.
Project Details and Significance
This project, designed for 9 million tonnes per annum (MTPA), will occupy an area of 5200 acres. It envisions a diverse product range, including 5.4 million tonnes of transportation fuels such as petrol, diesel, and aviation turbine fuel (ATF), as well as 3.2 million tonnes of petrochemical products.
Beyond the massive production capacity and investment, the project is significant due to planned specialized zones for green hydrogen, renewable energy, and a large marine crude oil terminal linked to the Ramampattnam port. The Andhra Pradesh government intends to transform the state into a regional energy hub, and for BPCL, launching this project means expanding its product portfolio towards high-margin petrochemical products, unlike its current portfolio dominated by transportation fuels.
Products and Environmental Aspects
The refinery will produce petrol, diesel, ATF, naphtha, LPG, bitumen, fuel, and propylene. The petrochemical unit is set to produce polypropylene, polyvinyl chloride (PVC), low-density polyethylene (LDPE), phenol, and acetone, among other goods.
Public hearings for the project were conducted by the Andhra Pradesh Pollution Control Board last December. The engineering firm India Ltd (EIL), acting as a consultant, informed the EAC during its meeting last month that there are no ongoing legal proceedings against the proposal.
According to data provided to the ministry by the company, BPCL plans to develop 1563 acres of green cover within the refinery and petrochemical complex, accounting for 30 percent of the total project area of 5200 acres. The total estimated cost of the project is set by BPCL at ₹103,408 crore, with capital expenditure for the Environmental Management Plan (EMP) amounting to ₹3022.
The company also proposed allocating ₹54 crore for Corporate Social Responsibility towards the environment (CSR) for various activities in surrounding villages. The project will create 400 direct jobs, and indirectly employ 13,600 people during the construction phase. During the operational phase, 1250 direct jobs and 3750 indirect jobs are expected.
Infrastructure and Company Plans
The company notified the ministry about the absence of national parks, wildlife sanctuaries, biosphere reserves, tiger or elephant reserves, or wildlife corridors within a 10 km radius of the proposed location. Nevertheless, some protected and reserved forests are located within this radius.
The total freshwater requirement for the project is 225,648 cubic meters per day, which will be supplied by a desalination plant. The company plans to draw 624,000 cubic meters of seawater daily for this plant through two intake pipelines. The project will also require 770 megawatts (MW) of electricity, of which 185 MW will be supplied by a planned captive power plant, and the remaining 585 MW will be sourced from the grid.
Currently, BPCL operates three refineries—in Mumbai, Kochi, and Bina—with a combined capacity of 35.3 MT, along with a petrochemical capacity of 0.83 MT. The company is also implementing an expansion of its Bina refinery to an additional capacity of 3.2 MTPA. As stated in the investor presentation, this Maharatna public sector undertaking has the potential to increase capacity to 45 MTPA through expansions at the Mumbai and Kochi refineries. The BPCL Board of Directors has already approved land acquisition and Distributed Fluid Residue (DFR) studies for the Andhra project.
The company is currently working on a comprehensive capital expenditure (capex) plan of ₹1.7 trillion, including board-approved commitments totaling ₹1.54 trillion. This amount comprises ₹75,000 crore allocated to the refining and petrochemical business, ₹32,000 crore for the top-tier segment, and ₹20,000 crore for marketing initiatives. Of the ₹75,000 crore designated for refining and petrochemicals, ₹6,000 crore is directed towards land and DFR studies for the Andhra project. The company is already spending ₹50,000 crore on establishing ethylene cracking and downstream petrochemical plants at the Bina refinery. Simultaneously, it is spending ₹5,000 crore on the Kochi refinery for a polypropylene production project and ₹14,000 crore at the Mumbai refinery to establish a Petroleum Residue Fluid Catalytic Cracking (PRFCC) unit.