Bid & Tender
MRPL Plans to Expand its Refinery Capacity by 2022

Date : May 19, 2017

Mangalore Refinery and Petrochemicals Ltd (MRPL) plans to invest Rs 150-180 billion in raising its Mangalore oil refinery capacity by 10 million tons by 2022. MRPL, a subsidiary of state-owned Oil and Natural Gas Corp (ONGC), is also looking at scaling up its petrochemical production capacity to clock larger margins, its Managing Director H Kumar said here. "We have asked Engineers India Ltd to prepare a feasibility report for raising refinery capacity from current 15 million tons per annum to 25 million tons," he said. The report is likely to be ready by June or July, he said adding the feasibility will determine the cost of the expansion.


Another company official said the expansion could cost anywhere between Rs 150 billion to Rs 180 billion. The company was previously looking at raising capacity to 21 million tons a year but now is targeting 25 million tons. This is part of its ambitious target of clocking Rs 50 billion net profit by 2022. MRPL reported its highest ever annual net profit of Rs 36.39 billion on a revenue of Rs 594.15 billion in 2016-17 fiscal. Kumar said key to expansion is availability of land and the company is looking at acquiring 1200 acres of land contiguous to refinery in Mangalore.


A government notification facilitating the acquisition is in advanced stage and land is likely to be available by December 2017 or January 2018, he said. "We will be able to take an investment decision after that," he said. He said MRPL is ready to produce Euro-VI grade diesel but is investing Rs 18.10 billion in converting gasoline of Euro-IV grade to Euro-VI. That project will be completed by September 2019, ahead of April 1, 2020 deadline the government has set for supply of Euro-VI grade petrol and diesel throughout the country.


Another official said EIL will study if the crude distillation unit (CDU) of 6 million tons or 10 million tons should be set up. "We would prefer 10 million tons," he said. The expansion is seen as a major margin driver, potentially doubling the company's profit per barrel. It is expected to help the company process cheaper, heavier crudes into high-value products like diesel, liquefied petroleum gas and propylene.