Guwahati, Feb 24: The expansion project of Numaligarh Refinery Limited, one of the largest refinery upgrades in the Northeast, is set to witness a significant cost escalation, with the company seeking approval from the Union government to revise the project outlay to ₹33,901 crore.

Officials said the Numaligarh Refinery Expansion Project (NREP), located in Assam’s Golaghat district, was earlier approved at ₹28,026 crore. The revised proposal, involving an increase of nearly ₹5,900 crore, is currently under active consideration of the Public Investment Board and has been submitted to the Ministry of Petroleum and Natural Gas for approval.

The brownfield expansion project aims to increase the refinery’s capacity from 3 million metric tonnes per annum (MMTPA) to 9 MMTPA, with completion targeted for December 2026. Company officials stated that nearly 85 per cent of the work has already been completed, with expenditure reaching ₹27,601 crore so far.

The project includes development of a 1,635-km Paradip–Numaligarh crude oil pipeline with a capacity of 9 MMTPA and a 610-km Numaligarh–Siliguri product pipeline designed to handle 5.5 MMTPA. Infrastructure additions also comprise 10 crude oil import storage tanks of 60,000 cubic metres each at Paradip and three storage tanks each for diesel and petrol at Siliguri.

Originally announced in 2019 at a cost of ₹22,594 crore — the largest single investment in the Northeast at the time — the project cost was revised to ₹28,026 crore in 2021 following the adoption of advanced technologies. According to NREP General Manager (Project) Pranjal Pathak, further escalation resulted from COVID-19 related disruptions, increased vendor costs and prolonged monsoon conditions. Work on the project is currently progressing at full pace.

The expansion is being financed through a 70:30 debt-equity structure by a consortium of 12 banks led by State Bank of India. Upon completion, the refinery’s production capacity is expected to increase substantially, including motor spirit output rising to 1.956 MMTPA from 384 MMTPA, high-speed diesel to 5.270 MMTPA from 1.900 MMTPA, and LPG production to 560 MMTPA from 60 MMTPA.

NRL is also advancing several associated projects, including a 360 KTPA polypropylene plant estimated at ₹7,231 crore and a 300 kg per hour green hydrogen facility under the National Green Hydrogen Mission, alongside a roadmap to achieve net-zero emissions by 2038.

The refinery’s ownership structure comprises Oil India Limited holding 69.63 per cent stake, the Assam government with 26 per cent, and Engineers India Limited with 4.37 per cent. The company has an authorised capital of ₹5,000 crore and a paid-up capital of ₹1,759 crore.