The Bina refinery was among the three joint sector projects conceived by the government, the other two being the east coast refinery (planned between the Indian Oil Corporation and Kuwait Petroleum Corporation) and the west coast project (a joint venture of Hindustan Petroleum Corporation and the Oman Oil Company, now put on the backburner following the latter's withdrawal from the project).

Bharat Petroleum Corporation and the Oman Oil Company are the promoters of the Rs 7,500 crore Bina refinery with equity stakes of 26 per cent each. The two have reportedly given in-principle approval to rope in the Oil and Natural Gas Corporation as thethird partner for the project though the upstream major is still to make up its mind on the move.

The refinery is crucial to BPCL as it will be only its second such facility after Mumbai which will cater in a big way to the requirements of the northern region of the country. However, it has been stalled for over two years now due to objections from the environment ministry on a kilometre onshore subsea pipeline linking the single point mooring (SPM) off the Vadinar coast to the crude oil terminal.

The crude received at the terminal will be transported by a 940 km cross-country pipeline from Vadinar to Bina via Jhansi. The SPM is proposed to be located 11 kilometres of the Vadinar coast in Gujarat Maritime Board (GMB) administrative territorial waters. It will be a catenary anchor leg mooring (CALM) buoy type which will receive crude from very large crude carriers of up to 2,73,000 DWT (deadweight tonnage).

The terminal, in turn, is located 200 metres away from Indian Oil Corporation's crude storageterminal at Vadinar. The advantages of the SPM location, experts say, are a calm sea without any need for dredging.

What has emerged very clearly is that there is no way the SPM location can be altered at this stage as all plans for the feasibility of the refinery have been worked out with this location in mind. "A change at this stage would not only be disastrous as regards the cost factor but may even prompt rethinking on the need to go ahead with the project in the first place. That is completely unacceptable," sources say.

The delay has cost the joint venture thousands of crores of rupees and the figure is threatening to escalate to "unbelievable proportions" if the impasse continues. Reports have indicated that the Oman Oil Company is as concerned and would not hesitate to walk out of the project if no solution is found soon.

According to experts, with Reliance Petroleum proposing a pipeline from Jamnagar to Indore, the very feasibility of the Bina refinery is in doubt. The government will finallyhave to strike the balance between encouraging private investment and ensuring survival of its own PSUs.