The Oil and Natural Gas Corporation (ONGC) will invest Rs. 35,000 crore (USD 7.6 billion) in the Special Economic Zone at Mangalore to house a Liquefied Natural Gas (LNG) plant, a 15 million ton (mt) refinery, petrochemical plant, and power plant.
However, the proposed Rs. 8,000 crore (USD 1.7 billion) refinery project to process crude oil pumped out by Cairn Energy in Rajasthan was found to be unviable unless the state Government is prepared to extend large-scale fiscal incentives. This conclusion includes the alternative of building a pipeline to refine the oil at Mangalore.
The ONGC had also found oil and gas in 10 new locations during 2005-06 including 5 in deep-sea areas in the Krishna-Godavari (KG) basin, 3 in shallow offshore areas off Mumbai, Saurashtra, and Krishna-Godavari regions, and 2 on land one each in KG basin and Assam.
Starting 2nd week of November, the company would commence shipping crude oil
Russian oilfield, Sakhalin-I with the first two cargos of crude oil each with a capacity of about 700,000 barrels and refined at the Mangalore Refinery & Petrochemicals Limited (MRPL). The refinery will use Rs. 8,000 crore (USD 1.7 billion) from its reserves and raise Rs. 5,200 crore (USD 1.13 billion) in debt instruments to finance the expansion of refinery capacity to 15 mt and is expected to be complete in 48 months.