Bharat Petroleum Corporation hopes to have nearly 50 million tonnes a year of refining capacity in place by 2020-21, a 60 per cent jump from its present level of 31 mt.
Over the next six years, BPCL has targeted at least 15 mt of refining capacity from each of its facilities at Kochi, Bina and Mumbai. Capacity increase at its fourth unit at Numaligarh, Assam, will depend on the Centre giving fiscal sops for the north-east in the near future.
Till that happens, Numaligarh will most likely operate at three mt even while BPCL is exploring the option of increasing this capacity three-fold.
The Kochi refinery currently processes 9.5 mt of crude oil. The integrated refinery expansion project, which is slated for completion next year, aims to increase that limit by over 60 per cent to 15.5 mtpa.
The new and improved unit is being built to produce better-quality auto fuels from even lower-grade crudes. As for the six-mt Bina refinery, a joint venture with Oman Oil Company, its capacity will be expanded in two phases; to 7.8 mt by 2018 and 15 mt by 2020-21.
This will involve an estimated outlay of between ₹21,000-23,000 crore. Oman Oil will not invest in the expansion.
The Numaligarh refinery is facing a double whammy of declining trend in domestic crude oil supplies from north-eastern oil fields and a withdrawal of six per cent discount on rail freight from the region’s refineries.
For BPCL in Numaligarh, expanding capacity to nine mt will allow it to import large quantities of crude, which will be more cost-efficient than importing smaller lots to tide over the current shortfall in crude supply.
Part of the project’s plan is also to build a pipeline carrying petrol and diesel to Bihar and eastern Uttar Pradesh. A more ambitious route would be supplying products to Bangladesh and Myanmar but this will need a clearer political roadmap, the official added.
BPCL’s flagship and oldest refinery in Mumbai can refine 12 mt but consistently runs at over 100 per cent capacity. The company believes that de-bottlenecking and increasing distillation can ramp up production to nearer 15 mt. When this increased refining capacity is in place by 2020-21, the company will have a far more comfortable demand, and supply ratio for its retail outlets. Its Mumbai counterpart, Hindustan Petroleum Corporation, had also scripted an aggressive expansion plan with a new refinery in Rajasthan while eyeing yet another facility in Ratnagiri.
While talks are apparently on with the Rajasthan government to expedite the project, the other plan in Maharashtra could take longer in becoming a reality largely due to environmental reasons. Apart from Mumbai, HPCL has facilities in Visakhapatnam and Bhatinda.
Meanwhile, the country’s largest refiner, Indian Oil, is gearing up to commission its 15-mt Paradip refinery in September. This will take its total capacity to 80 mt and place it well ahead of Reliance Industries, which accounts for 62 mt from its two units in Jamnagar, Gujarat.