Mumbai: Hindustan Petroleum Corporation Ltd’s (HPCL) long-delayed refinery and petrochemicals complex in Rajasthan is finally taking shape.

India’s third-largest state-run refiner will shortly raise 28,000 crore in debt from a consortium of banks, two officials at HPCL told Mint.

“We don’t need the funds immediately. We will be drawing it as and when the project needs. It will be a combination of multiple instruments. As of today, we have all the approvals in hand," said M. K. Surana, HPCL’s chairman, and managing director.

He said the company will finalise 10 of the 12 licensed technology providers by the end of next week, with an aim to complete the project by 2022.

Separately, a person familiar with the matter said on condition of anonymity that the debt would be raised by the end of September or early October.

“We are keeping the size of the consortium small so only seven to eight banks will participate. We are raising funds based on the detailed project report," the person said.

A start to the refinery at Barmer in Rajasthan will ease HPCL’s woes. The 9-million-tonnes-per annum (mtpa) facility which includes a two mtpa petrochemicals complex has been delayed by six years, escalating project costs by 6,000 crore.

The project was conceived in 2013 at a cost of 37,230 crore with production slated to commence by 2017-18. But the BJP government which assumed power in Rajasthan in 2014 put the refinery’s terms and conditions under review.

A pact was signed eventually on 18 April this year between the refiner and the state government which had allotted 4,800 acres.

HPCL and the Rajasthan government own 75% and 25%, respectively, in the joint venture—HPCL Rajasthan Refinery Ltd. The current project cost of 43,129 will be comprise mainly of the 28,000 crore debt with the remainder from equity.

HPCL plans to use processed crude from Vedanta Ltd’s Barmer oil field as well as imported crude oil.

HPCL last week unveiled plans to invest 75,000 crore over five years across its business segments. It currently has a total refining capacity of 27.1 mtpa. With existing refineries in expansion mode, new ones on the anvil and an impending merger with Mangalore Refinery and Petrochemicals Ltd (MRPL), HPCL will see its refining capacity more than double over the next five to seven years.

The company is expanding its Visakhapatnam refinery in Andhra Pradesh from the present 8.33 mtpa to 15 mmtpa at a cost of 20,928 crore.

The project includes bottom upgradation facilities and make the refinery capable of producing Bharat Stage VI compliant motor fuels and enhance its complexity and profitability.

Its Mumbai refinery is being expanded from 7.5 mtpa to 9.5 mtpa at a cost of 5,060 crore. HPCL is also partner in the 60 mtpa Ratnagiri Refinery and Petrochemicals Ltd in Maharashtra.

Surana said HPCL is continuing discussions with parent Oil and Natural Gas Corporation (ONGC) to merge its unit MRPL with itself. This January, ONGC acquired the government’s 51.11% stake in HPCL through an all-cash deal of 36,915 crore.

HPCL owns 16.96% in MRPL while ONGC holds 71.63%. MRPL’s refining capacity is 15 mtpa and the company is expanding the same to 25 mtpa.

“We can integrate facilities and create lots of synergies with MRPL," said Surana. “We can unload crude at Mangalore and get freight advantage. We have a refinery in Vizag on the East Coast, Mumbai on West Coast, Bathinda in North and Mangalore in South. We also have a big research and development facility in Mangalore," he added.

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