Bid & Tender
India's First Biofuel Refinery Project to Be Ready By 2019

Date : Feb 12, 2016

Numaligarh refinery inks MoU to secure feedstock supply for bio-refinery project Ethanol production from paddy plants soon Meet to discuss poor supply of ethanol Petroleum ministry considers ethanol price hike as distilleries balk at supply Govt mulls higher price for ethanol. With Indian oil marketing companies (OMCs) witnessing a surge in the requirement of bio-fuel, as national policies mandate certain percentage of its blending with petrol and diesel, India within next three years will get its first bio-fuel refinery in Assam.


It will be implemented by Numaligarh Refinery Limited (NRL), in partnership with Chempolis Oy, a Finland-based company, the Rs 9.50 billion project will use bamboo, which grows abundantly in the region, as its feedstock and produce fuel grade bio-ethanol. Presently, the ‘National Policy on bio-fuel 2009’ mandates 10% blending of petrol and diesel and targets to up this level to 20% in near future. The refinery would be producing 49,000 tons of ethanol annually and this would primarily be used to blend petrol and diesel of NRL and the surplus will be sold to other oil marketing companies to cater to the Eastern and Northeastern markets.


The requirement of bio-fuel is expected to shoot-up in Northeastern states post 2017 as the exemption of selling blended petrol and diesel would end by then. The project has been planned keeping in view the future demand of bio-fuel in the region. “By the next week all the approvals and formalities from the government are expected to be over. The work is going to start by this financial year and we expect to complete the project within two and half years to three years. As this project is now made part of the ‘Hydrocarbon Vision 2030 for Northeast’, we expect things would move fast,” said a NRL spokesperson.


The company in 2014 had signed a partnership agreement with the Finnish company for jointly implementing the “world-class” project. Chempolis Oy has developed a patented technology – formicobio, for processing non-food raw materials into cellulosic ethanol, cellulosic sugars, bio-chemicals and bio-coal. Sources from NRL informed that the company would convene a board meeting next week to take its final approval on forming a joint venture with the Finnish company. “As soon as we get the board approval, we will proceed and form the 50-50 joint venture,” the spokesperson said. The funding will have a 70:30 debt-equity ratio. The project would come up within the existing campus of NRL.


Production of fuel grade bio-ethanol is expected to reduce NRL’s requirement of imported Methyl Tertiary-Butyl Ether (MTBE) and Py-Gas for petrol blending due to higher octane number of ethanol and would result in net savings for the company. NRL and Chempolis jointly undertook an assessment study for ascertaining the availability of the required feedstock in Northeastern India. The Finnish company also carried out experimental testing of various specimens of bamboo and other potential biomass feedstock materials available in the region and provided the entire pre-project technical consultancy required for completion of the Detailed Feasibility Study for the project.


The project is expected to give a fillip to bamboo cultivation in the region and help bring an economic transformation for many in rural areas. Last December, NRL had inked a Memorandum of Understanding (MoU) with Nagaland Bamboo Development Agency (NBDA) for sourcing of 200000 tons of semi-processed bamboo from Nagaland annually. “This refinery project will link local farmers of the region to the hydrocarbon economy of the nation. It has the potential to bring around an economic revolution in the rural areas of northeast similar to what tea has been doing in Assam,” said Dharmendra Pradhan, Union petroleum and natural gas minister, here on Tuesday.


Numaligarh Refinery, which is situated in Golaghat district of Assam, is a joint venture between Bharat Petroleum Corporation Limited (BPCL), Assam government and Oil India Limited (OIL), with BPCL being the majority shareholder.