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India’s refining industry – expansion continues! – Part 2

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.

Source: EIA, EPC

The largest public refining company is Indian Oil Corp. Ltd. (IOCL), which, in addition to its own refineries (see India’s refining industry – expansion continues! – Part 1), controls Chennai Petroleum Corp. Ltd. (CPCL) with its two refineries with a total capacity of over 230 Mbpd.

Chennai Petroleum Corp. Ltd. (CPCL)

The company's largest refinery is the Manali Refinery with a capacity of more than 210 Mbpd. In February 2018, the refinery fully started up its long-planned residue upgradation project (RUP) including installation of a 2.2 Mtpa delayed coker and a sulfur recovery unit, revamp of a once-through 1.85 Mtpa hydrocracker and installation of unidentified associated utilities and off-site facilities. The RUP was designed to increase distillate yields as well as maximize feedstock flexibility to process high-sulfur, heavy crudes.

In the future, the Manali Refinery has plans for the improvement of the quality of motor fuels produced to BS-6 standard, for which the company will modernize the refinery’s existing 1.8 Mtpa diesel hydrotreating unit to a capacity of 2.4 Mtpa—as well as the addition of a sulfur recovery unit and other associated installations, including a 0.6 Mtpy FCC gasoline desulfurization unit. The mechanical completion is expected to June 2019.

The most ambitious plans announced by CPCL are regarding its Nagapattinam refinery. The company plans to invest $5.5 B to significantly increase refining capacity at its 20 Mbpd refinery: Phase 1 will increase the capacity to between 120 Mbpd and 180 Mbpd, Phase 2 will boost capacity up to 300 Mbpd.

Bharat Petroleum Corp. Ltd. (BPCL)

Bharat Petroleum Corp. Ltd. (BPCL), second largest public refiner, will invest $6.75 B to increase its refining capacity from 730 Mbpd to 1.18 MMbpd by 2022. These expansion plans include:

  • The $3.75 B Bina refinery project to increase capacity from 120 Mbpd to 320 Mbpd. The refinery is operated by Bharat Oman Refineries Ltd (BORL), a 50-50 joint venture between Oman Oil Co and BPCL.
  • A $2.2 B project to triple refining capacity at the Numaligarh refinery from 60 Mbpd to 180 Mbpd.
  • A $1.5 B expansion of the Kochi and Mumbai refineries: the Kochi refinery will be expanded from 310 Mbpd to 400 Mbpd; the Mumbai refinery will increase its refining capacity from 240 Mbpd to 280 Mbpd.

The Numaligarh refinery expansion is a part of the ambitious “Hydrocarbon Vision 2030 for the North East” that is under active consideration by the Government of India. Also plans for implementing the first of its kind Bio Refinery with bamboo as a feedstock has taken a definite shape with a JV “Assam Bio-Refinery Pvt. Ltd.” incorporated during June 2018 with equity participation from Numaligarh Refinery Ltd. (NRL), Fortum 3BV, Netherlands and Chempolis Oy, Finland.

“NRL’s new venture shall produce 62 million liters of bio-ethanol by using around 0.5 million tons of bamboo per annum which is going to be a game changer in terms of additional revenue generation for bamboo farmers,” NRL Managing Director S.K. Barua said.

Oil and Natural Gas Corp. Ltd. (ONGC)

Oil and Natural Gas Corp. Ltd. (ONGC) is the only fully–integrated oil and gas company in India, operating along the entire hydrocarbon value chain. The refining segment of the company is represented by a 51% stake in Hindustan Petroleum Corp. Ltd. (HPCL), 72% stake in Mangalore Refinery and Petrochemicals Ltd. (MRPL) and 13,000 bpd Tatipaka refinery.

HPCL plans to expand its capacity of 354 Mbpd up to 670 Mbpd by 2022. This includes expansion projects at Visakh and Mumbai refineries (approximately $3.8 B) and a new 180 Mbpd refinery-petrochemical plant in Pachpadra in Rajastan. The $3.15 Visakh refinery expansion project will increase refining capacity from 167 Mbpd to 301 Mbpd by mid-2020. The company will invest $631 MM to expand Mumbai refinery’s capacity by 40 Mbpd to 191 Mbpd.

HPCL and Mittal Energy Ltd. JV (HMEL) will invest $170 MM to upgrade the Bahinda refinery to meet BS-6 specifications. HMEL also plans to expand the refinery’s capacity from 181 Mbpd to 226 Mbpd.

In addition, HMEL plans to enhance the integration between refining and petrochemicals. In August 2018, Maire Tecnimont S.p.A. announced that its subsidiary Tecnimont S.p.A., in consortium with its Indian affiliate Tecnimont Private Limited, was awarded two EPCC Lump Sum contracts by HMEL, for the implementation of new HDPE and PP units with capacities of 450 ktpa and 500 ktpa, respectively. The time schedule is 25 months for mechanical completion.

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