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India’s refining industry – expansion continues! - Part 1

By the end of 2017, India’s refining capacities reached almost 5 MMbpd. Today, India is the world’s 4th largest oil refiner following USA, China and Russia. However, from an industry development viewpoint, most interesting is the changing dynamics of refining capacities. Over the past ten years, India has demonstrated one of the highest growth rates, amounting to 5.2% per year.

Naturally, this growth is due to domestic consumption of petroleum products, which over the past decade has amounted to 4.8% per year, but it is not solely this; the Government of India provides serious support to development of the refining industry aiming at establishing as an international refining hub. As a result, since the mid-2000s, India has been a net-exporter of petroleum products, and the country does not plan to stop there - according to recent announcements, India plans to increase its refining capacity to 6.2 MMbpd by the early 2020s and to approx. 12 MMbpd by 2040.

State-controlled entities dominate India’s refining industry – in 2017 public sector refineries accounted for over 60% of total refinery crude throughput. India’s largest state-owned refining company, Indian Oil Corp. Ltd. (IOCL), owns 9 refineries with a capacity of 1.4 MMbpd. The company plans to increase its domestic refining capacity by nearly 500 Mbpd by 2022. IOCL is investing $8.1 B to expand the Paradip refinery to 400 Mbpd by 2021/2022. Over $1.3 B will be spent to expand the Barauni refinery by 40 Mbpd to 181 Mbpd. Finally, IOCL is investing in expanding the Panipat and Koyali refineries by 100 Mbpd to 500 Mbpd and by 86 Mbpd to 361 Mbpd, respectively.

In addition to expanding crude distillation facilities, IOCL is implementing a programme to improve the quality of motor fuels produced up to BS-6 standard, scheduled to be completed by September 2019. One of the key roles in this modernisation project plays on the availability of sufficient capacities for hydrogen production. In July 2018 IOCL chose Honeywell UOP’s Pressure Swing Adsorption (PSA) technology to supply high-quality hydrogen at its refineries. Under the terms of the agreement, Honeywell UOP will provide new PSA units to the refineries at Gujarat, Panipat, and Mathura, and will upgrade existing hydrogen plants with UOP’s Polybed™ PSA technology at refineries in Haldia, Guwahati and Gujarat. Together, the six projects will generate 166,000 tpa of hydrogen, representing an almost 30% increase for IOCL. “Honeywell UOP’s hydrogen technology is part of IOCL’s efforts to produce BS-VI fuels before the end of 2019,” said Mike Banach, regional general manager for Honeywell UOP India. “This is a project of national importance to help India reduce pollution and improve its quality of life.” The project includes a substantial amount of Indian-made components and domestic fabrication, in line with the government’s “Make in India” programme.

In terms of bottom-of-the barrel development, IOCL continues to implement the Distillate Yield Improvement Project (DYIP) at the Haldia refinery. The key units of the complex are a 1.7 MMtpa Delayed Coking Unit (DCU) licensed by Foster Wheeler (now Wood plc) and a 1.4 MMtpa Coker Gas Oil Treating unit licensed by Axens. Total project investment is estimated to be around $570 MM. The project is at the final stage; commissioning is underway.

Another major project is the construction of the INDMAX FCC unit at the Bongaigaon refinery. INDMAX technology is a proprietary of IOCL’s R&D division, which fits perfectly into the “Make in India” programme. Unlike typical FCC, INDMAX produces twice as much LPG, which will reduce its deficit on the domestic market. The unit capacity is 0.74 Mmtpa and the total investment in the project is estimated at around $350 MM. As of September 2018, the project's progress is at 76% and its commissioning is scheduled for November 2019.

As a state-owned company, IOCL actively participates in the “Make in India” programme, including R&D - in addition to INDMAX, the company developed OCTAMAX technology that converts C-4 streams from FCCU and/or steam cracker units to high-octane gasoline (~120 RON) blending components. In January 2018, a 55,000 tpa unit was commissioned at the Mathura refinery. Also, at the Guwahati Refinery, a 35,000 tpa demonstration unit operates its own technology, INDdeptG, that is a reactive absorption process for deep desulfurisation of gasoline streams.

To find out more about modern bottom-of-the barrel technologies and clean fuel technologies, please don't miss out on attending EPC’s specialised and focused events: BBTC-MENA taking place December 3-4, 2018 in Bahrain, and ME-TECH taking place February 26-28, 2019 in Abu-Dhabi.

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