refining and marketing companies signed the joint venture agreement here this evening.
Oil Minister Dharmendra Pradhan said though India is the world's third largest energy consumer after US and China, its per capita energy consumption is one-fourth of the world average.
"Domestic oil demand is likely to climb to 500 million tonnes by 2040. Against this, our domestic refining capacity currently is 230-235 million tonnes. We need to plan capacity addition to not just meet this demand but also of export market," he said.
Already, 55 million tonnes of brownfield refinery expansion has been finalised at existing refineries and a new 9 million tonnes unit is planned at Barmer in Rajasthan, he said. He said the 60 million tonnes capacity refinery at Babulwadi, Taluka Rajapur in Ratnagiri district is being set up keeping in mind the future fuel demand and the export potential of the country.
The refinery will have an accompanying mega petrochemical plant, Singh said adding the petrochemical plant would include an aromatic complex, naphtha cracker and polymer complex.
The project will take five-six years after land acquisition and all clearances, the minister added.
The entire refinery will include three crude units of 20 million tonnes each.
IOC has been looking at West coast for a refinery as catering to customers in West and South was difficult with its refineries mostly in the North.
HPCL and BPCL have also been looking at a bigger refinery because of constraints they face at their Mumbai units. The refinery will produce petrol, diesel, LPG, ATF and feedstock for making petrochemical that are basic building blocks in plastic, chemical and textile industries.
Fifteen million tonnes a year is the biggest refinery any public sector unit has set up in one stage. IOC recently started its 15 million tonnes unit at Paradip in Odisha.
Reliance Industries holds the distinction of building the biggest refinery in India till now.
It built its first refinery at Jamnagar in Gujarat with a capacity of 27 million tonnes, which was subsequently expanded to 33 million tonnes. It has built another unit adjacent to it for exports, with a capacity of 29 million tonnes.
Being on the West coast will provide the unit a natural advantage of easily sourcing crude oil from the Middle-East, Africa and South America, officials said, adding East coast was not being considered as shipping crude oil there will add at least USD 1 per barrel to cost.
India has a refining capacity of 232.066 million tonnes, which exceeded the demand of 194.2 million tonnes in 2016-17 fiscal.
According to the International Energy Agency (EA), this demand is expected to reach 458 million tonnes by 2040.
IOC has 11 refineries with a total capacity of 81.2 million tonnes while BPCL has four refineries with a total capacity of 33.4 million tonnes. HPCL has three refineries with a total capacity of 24.8 million tonnes.