MRPL to complete capacity expansion by March 2012: Sharma

NEW DELHI: Mangalore Refinery and Petrochemicals (MRPL) will complete expansion of its refining capacity to 15 million tonne by March 2012, company Chairman R S Sharma said on Tuesday.

"We initially had teething problems like availability of land. We have now overcome all those problems and moving forward, project implementation will be going smoothly," he told reporters here.

The refining unit of state-run Oil and Natural Gas Corp (ONGC) currently has a 9.69 million tonne refinery at Mangalore, Karnataka.

"Mechanical completion of the expansion refinery is targeted for October 2011 and actual commissioning in the first quarter of 2012," he said. "The commissioning will be in time to avail the seven-year holiday for payment of income tax that will not be available for refinery projects commissioning after March 31, 2012."

Project cost has been revised at Rs 12,412 crore which will be financed in 2:1 debt-equity ratio. "We have not yet frozen on the options for raising debt. We shall be doing so next fiscal as majority of the funds would be required by the end of 2009 (calendar year) or at the beginning of 2010," he said.

MRPL Managing Director U K Basu said the company was taking advantage of the current global meltdown and placing orders. "We are well aware that projects world over have been shelved and we are booking orders at fabricators and equipment suppliers (occupying the vacant slots)."

The expansion was originally estimated at Rs 7,943 crore.