JAMNAGAR (India), Mar 19 (PTI): Newly-formed Reliance Petroleum Limited (RPL) would set up the world's first refinery in a special economic zone (SEZ) that is expected to be completed by December 2008 with a capital outlay of Rs 270 billion.
Sources in RPL told a group of visiting journalists here that the new refinery would be the world's largest grassroots refinery with a production capacity of 6.6 lakh barrels per day (BPD).
It would be set up near RIL's Jamnagar refinery in western Indian state of Gujarat.
With the commissioning of RPL in 2008, the combined production capacity of Reliance group would be 1.25 million BPD, making it the world's largest refinery.
RPL sources said that the debt-equity ratio of the SEZ refinery is 60:40, adding that out of the 900 million shares, 20 per cent would be offered to the public. RPL had already filed the draft red herring prospectus with Securities and Exchange Board of India for making an initial public offer which would be made through the book-building route.
Sources said that Reliance had decided to set up an export- oriented refinery as India had surplus petroleum products production as against a shortage in refining capacity in the United States and Europe.
"RPL wants to capture this market," the sources said, adding that the complexity index of the SEZ refinery would be high which would result in higher profit margins since the new plant would be able to process all type of crude.