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Informist, Thursday, Oct. 9, 2025

 

--Source: Andhra offers capital subsidy, incentives, cheap power to BPCL 
--Source: Andhra's incentives to BPCL worth INR 726.5 bln spread over 20 yrs 
--Source: Andhra govt committed to reimburse 75% of capex to BPCL in 20 yrs 
--Source: BPCL to develop green belt on 1,127 acres at Nellore refinery site 
--Source:BPCL to develop refinery, infra on 3,352 acres of land near Nellore 
--CONTEXT: BPCL plans to set up INR 969-bln petroleum refinery near Nellore 
--Source: Andhra govt issues order allotting 6,000 acres to BPCL near Nellore 

By Narayana Krishna

 

HYDERABAD - The Andhra Pradesh government has issued orders allotting 6,000 acres of land near Ramayapatnam port in Nellore district to Bharat Petroleum Corp. Ltd. for a proposed 9-12 million tonne greenfield petrochemical complex and refinery project, a source in the state government said. The project involves an estimated investment of INR 968.62 billion, the source said.

 

The state government has also given a written commitment to company to reimburse up to 75% of its capital expenditure on the project in 15 annual instalments over 20 years, once the project attains the required milestones, according to a document reviewed by Informist.

 

As per the plan submitted to the state government, BPCL has proposed to invest INR 48.42 billion on the project in FY26, INR 96.86 billion in FY27, INR 145.3 billion in FY28, INR 290.6 billion in FY29, and INR 387.5 billion in FY30, by when the project will reach full capacity and start commercial operations.

 

The Andhra Pradesh government has advised all government departments to coordinate with the company to help implement the project as planned, the source said.

 

"In-principle approval of total financial incentives up to 75% of the capital expenditure over a period of 20 years from the commencement of project activities, for the Ultra-Mega Project of more than 96,000 Cr (INR 960 billion) under tailor-made incentives provision of AP Industrial Development Policy (2024-29) recommendations," the government order said.

 

According to the order, the total incentives BPCL is expected to get for the project are pegged at INR 726.5 billion, spread over 20 years. The incentives include capital subsidy, 100% refund of goods and services tax for the operational phase and the construction phase, cross subsidy surcharges of power usage, and 100% waiver of stamp duty and registration fee.

 

Of the 6,000 acres that the company is getting, BPCL plans to use 3,352 acres for a petrochemical complex and refinery, while 1,127 acres will used to develop a green belt across the project area. In September, BPCL has obtained the initial nod from an expert appraisal committee under the Ministry of Environment, Forest and Climate Change to prepare the terms of reference for the project. While the Andhra Pradesh government's latest order is based on a pre-feasibility report, the company expects a final report on the project by December.

 

According to reports, BPCL is actively engaged with several global oil majors to induct a partner for the project. The companies, including from some Gulf nations, Russia, and US, have been in touch with BPCL for the project, though no names have emerged so far. The partnership is intended to secure feedstock as well as technical capabilities.

 

At 1035 IST, shares of BPCL were trading at INR 348.85 on the National Stock Exchange, up 1.2% from the previous close.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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