The refinery is scheduled to be commissioned in 2002. The project was among the three in the joint sector conceived by the government. The west coast was planned for Hindustan Petroleum Corporation and the Oman Oil Company; the east coast for Indian Oil Corporation and Kuwait Petroleum Corporation while central India was earmarked for the Bina project.

The in-principle approval by BPCL and Oman Oil to include ONGC in the plan will mean that the ball is now in the latter's court. It may be recalled that HPCL has also been in talks with ONGC for a 26 per cent stake in the 9-million-tonne Punjab refinery. The upstream majorhas indicated that a final decision will be taken in a month. Now, with the possibility of a controlling stake in the Bina plan, too, ONGC will have to figure out which project will be a better option.

In terms of timing, the Bina refinery stands a better chance of being commissioned before the Punjab project. Hindustan Petroleum is yet to identify its partner, and is still in talks with Exxon Corporation of the US and ONGC. The Punjab government is keen on getting the project going, and, consequently, the ministry of petroleum and natural gas is believed to have prevailed upon the ONGC to team up with HPCL.

However, sources say another factor that would influence ONGC's decision will be the opportunities in marketing while picking up a stake in a refinery. The corporation's eventual objective is to become an integrated oil company like its international counterparts, and that would translate into honing its skills in marketing. Further, refining margins are hardly attractive compared with the returns inthe retail product segment, and ONGC would be justified in eyeing this option in return for making an investment in a refinery.

Bharat Petroleum was reported to be as keen on offering ONGC a 26 per cent stake in its UP project, which was initially planned with Shell. It is still not certain if the refinery will be implemented during the Ninth Plan period, which ends in 2002. Likewise, ONGC is not likely to participate in the Paradip refinery as it will require the approval of Indian Oil's partner, Kuwait Petroleum Corporation.

The Bina refinery will be supported by three-lined projects - a marketing terminal being set up by BPCL to distribute the products of the refinery; a power project based on residual fuel supplied by the refinery being set up by a company promoted by Hindustan Development Corporation, which will supply power and steam to the refinery; and a product pipeline from Bina to Kanpur via Jhansi being laid down by Petronet India to evacuate part of the production economically to the northernregion.