It hit a snag, however, after choosing a location in Kathivakkam, which formerly was a town outside of Chennai, but was absorbed by the larger city in 2011. A high-ranking official with the Chennai Metropolitan Development Authority told Lube Report Asia that the site selected by Gulf had been designated for hazardous industrial use when Kathivakkam was a separate municipality, but that Chennai does not do all such activities within its limits. As a result, the CMDA advised Chennai to deny permission for the blending plant to be built.

The CMDA official, who spoke on condition that he not be identified, said Gulfs file is still being reviewed but otherwise declined to comment. Government agencies are prohibited from discussing such matters when elections are pending, as they are now in the state of Tamil Nadu, where Chennai is located.

But GOLIL Chief Financial Officer Manish Kumar Gangwal, during a Feb. 10 conference call about the companys third quarter earnings, said the project is moving ahead. We are progressing well on the Chennai plant now, he said, according to a transcript of the event on the companys website. We have received a clearance from single window, which is a sort of consent to establish, and with that we will be starting the work on our tendering and other things.

Another official told Lube Report Asia on condition of anonymity that the issue has been resolved and that Gulf is working on the project, and aims to complete it in one and a half years.

In a recent interview with an Indian news channel, Gulf Oil International Chairman Sanjay Hinduja also expressed the hope that the lubricants plant in Chennai will be commissioned within the next 18 months. He added that the company plans to spend U.S. $150,000 on the project, which would be the largest capital expenditure yet for the lubricants business.

GOLIL currently has a blending plant in Silvassa that was recently expanded and now has capacity to make 95,000 metric tons of lubricants per year.