State-run Bharat Petroleum Corporation Ltd (BPCL) will invest nearly USD 11 billion (Rs 968.62 billion) to construct a new refinery with a capacity of 180,000–240,000 barrels per day in the southern state of Andhra Pradesh, according to a state government order issued on Thursday.

The Andhra Pradesh government has allocated 6,000 acres of land for the refinery and petrochemicals complex, and has instructed BPCL to commence commercial operations by January 2029.

The project, which is expected to significantly boost industrial growth in the region, comes as the state—led by Chief Minister Chandrababu Naidu, a key ally of Prime Minister Narendra Modi—seeks to attract major investments to mitigate financial pressures arising from high debt and extensive social welfare spending.

According to the order, the state government will offer financial incentives amounting to 75 per cent of the project’s estimated capital expenditure over a period of 20 years to support BPCL’s investment.

BPCL, India’s second-largest state-owned refiner, currently operates three refineries with a combined crude processing capacity of 706,000 barrels per day. The new refinery in Andhra Pradesh will further strengthen the company’s refining and petrochemical portfolio, positioning it as a key player in meeting India’s growing energy demand.