HPCL Plans to Increase Vizag Oil Refinery Capacity by as much as 20%

State-run Hindustan Petroleum(HPCL) plans to increase the capacity of its Vizag oil refinery in southern India by as much as 20% to meet growing local fuel demand, its Chairman Rajneesh Narang said.

India is raising its crude processing capacity as the world's third-largest oil importer and consumer wants to be a major global refining hub while its fuel demand is expected to continue growing for the next decade.

HPCL recently expanded the capacity of the Vizag refinery to 300,000 barrels per day and is looking for a further increase.

"We are exploring raising the (annual) capacity by 2-3 million (metric) tons (40,000-60,000 bpd). We have to get board approval for this," Narang said at the India Energy Week conference, without providing the estimated cost or timeframe.

HPCL will soon start operations at the Vizag refinery's new secondary units, including a 3.5 million-ton-per-year (tpy) residue upgradation unit to boost its distillate yield by 10% and improve its gross refining margin (GRM) by $3 per barrel. It will also bring online a 2.6 million tpy diesel hydro desulphuriser.

India's fuel demand is expected to rise alongside the expansion of its economy, though motorists are being drawn to electric vehicles and industries are switching to renewables from diesel-generated electricity to cut their carbon footprints.