BPCL and ONGC to Collectively Setup Petrochemical Refinery Unit in UP

India's Oil and Natural Gas Corporation (ONGC) is planning a multibillion-dollar refinery and petrochemical project in the country's most populous state to capitalize on growing fuel demand. The New Delhi-based firm, India's largest oil explorer, is eyeing a 9-million-ton-per-year facility in Uttar Pradesh that could exceed a cost of 700 billion rupees ($8.3 billion), according to four people familiar with the discussions who requested anonymity due to the confidential nature of the talks. ONGC has engaged in discussions with Bharat Petroleum Corporation Ltd. (BPCL) to establish the unit in Prayagraj, where BPCL owns land.

India’s economy is one of the fastest-growing globally, driving increased demand for crude oil and petrochemicals, even as renewable energy capacity expands. Large infrastructure projects in India often face delays due to slow land acquisition, but access to BPCL's land could offer a significant advantage in speeding up the process.

BPCL itself is considering setting up a refinery and petrochemical facility in either Andhra Pradesh or Uttar Pradesh, according to two sources. The company has hired a US-based consultant to conduct a location study, and while Uttar Pradesh is an option, Andhra Pradesh is currently favored due to state-offered incentives.