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Hyderabad: Amerind Petroleum Private Limited (Amerind) proposes to set up a nearly Rs.120 billion petroleum refinery near Visakhapatnam, in joint technical collaboration with US-based American Industrial Corporation (AIC). The refinery to come up in Petroleum, Chemicals and Petro-chemicals Investment Region (PCPIR) near the coastal city of Visakhapatnam, will have an initial refining capacity to process 7.5 million tonnes of crude oil per annum (or 150,000 barrels per day) and will produce the entire range of petroleum products.

A memorandum of understanding between Andhra Pradesh government and Amerind to set up the refinery was signed here Thursday in the presence of Chief Minister N. Kiran Kumar Reddy. Major Industries Minister J. Geeta Reddy later told reporters that the first phase of the project would be set up on turn key basis by AIC by relocating an existing and running refinery acquired by it in the US. The estimated cost of the first phase would be Rs.25.25 billion ($505 million).

In the second phase, the project would be expanded to a total refining capacity of 15 million tons per annum along with a petro-chemical complex, at an additional cost of Rs.86.11 billion.

The minister said this would be the first refinery in the state in the private sector. It would have its own captive floating marine terminal, with three underwater pipelines to receive the imported crude oil and to dispatch products for exports.

Promoted by Hyderabad-based technocrat entrepreneur Syed Badruddin, Amerind will set up the refinery with financial assistance from Exim Bank of the US. Exim Bank will provide loan funding of $375 million for US costs of the project and up to 30 percent of this for local costs in India.

AIC is a consortium of 14 American companies with 25 to 30 year experience in petroleum refineries. The minister said the total implementation time for the project would be 30 to 36 months from the date of receipt of all clearances from the state and the central governments.

The refinery is expected to contribute Rs.15,544 crore to the central and state governments by way of taxes. It would also provide direct employment to 55,000 people. Geeta Reddy said the refinery planned to set up 3,500 retail outlets to market its products over a period of three to five years from the date of commencement of commercial production.