The central India refinery, better known as Bina refinery, was one of thethree joint sector projects mooted by the Centre way back in 1992 as part ofa plan to encourage participation by foreign companies in India's refiningsector. None of these plans has seen the light of day with one - the westcoast refinery in Maharashtra (a joint venture between Oman Oil andHindustan Petroleum Corporation) - actually shelved.

The other, the east coast refinery in Paradip, Orissa, was conceived as ajoint venture between IndianOil and Kuwait Petroleum Corporation. The latterwithdrew after years of indecision and IOC has now decided to go it alonefor the Rs 7,600 crore project.

The Bina refinery ran into several environment-related hurdles which haveonly recently been overcome. The five year wait has resulted in costoverruns of over Rs 2,000 crore and all this while, Oman Oil has continuedto reiterate its commitment to the project.

It was only during the last year or so that the company was approached bythe Ruias to consider a 26 per cent stake in Essar Oil's 10.5 million tonnerefinery being commissioned in Vadinar, Gujarat, two years down the line.Sources say that Oman Oil has expressed its interest in the project as it isnearly 50 per cent complete and will go onstream well before the Binarefinery.

BPCL was, incidentally, the original suitor for Essar Oil but has decidedagainst participating in the plan. There have been unconfirmed reports thatOman Oil asked the PSU to consider an investment here and would, in turn,pick up equity in Bina. The latest development is that Oman is more or lessinclined towards Essar Oil though the Centre has been asking for a rethinkon Bina. All indications are that this is a remote possibility.

Sources in New Delhi say that the petroleum ministry has no objections toOman Oil taking a stake in the Ruias-promoted refinery but is as categoricthat this should not preclude it from investing in the Bina project also."Central India is the ideal location for the refinery as this is a regionwhich is in desperate need of petro-products. These can be carried viapipeline right up to Kanpur," observers say.

BPCL has, in the meantime, indicated that it is ready to go it alone for therefinery as it now needs to supplement capacity in a hurry. The PSU had madean informal offer of equity to IOC also but the Fortune 500 company wasapparently not too interested as it needed to streamline investments for itsown Paradip refinery.

The Oil and Natural Gas Corporation was among the first to express itsinterest in taking a stake of around 15 per cent in the Bina project. Thiswould have marked the company's foray into the downstream sector. However,since the time ONGC and IOC decided to team up in petro-related activitieslike refining and exploration, the former decided to give up all plans topursue an investment in Bina. This decision was also prompted by the longdelay in seeking environmental clearance for the refinery which added to theoverall cost.