The private sector share of India’s refineries only accounts for about a third, but these companies own the country's two largest refineries – Jamnagar (1,372 Mbpd) owned by Reliance Industries Limited and Vadinar (402 Mbpd) owned by Nayara Energy (see Figure 3).
Source: EIA, EPC
Reliance Industries Limited
Reliance Industries Limited (RIL) is one of the largest Indian companies (# 2 by capitalization and # 2 by revenue). The company's activities span the entire petroleum value chain – exploration and production, petroleum refining and marketing as well as the production of petrochemical products, textile businesses and digital solutions.
The company operates the world's biggest refinery complex at the port of Jamnagar in the western Indian state of Gujarat. The first Jamnagar plant has the capacity to process 663 Mbpd of crude while the second site can process another 709 Mbpd.
In recent years, RIL’s main emphasis in its development in terms of the petroleum value chain, has been on expanding the production of petrochemical products, and the largest project is the J3 project at Jamnagar.
In early 2018, RIL reported the successful launch of a $4.5 billion Refinery Off-Gas Cracker (ROGC) complex of 1.5 MMtpa ethylene capacities along with downstream plants and utilities. The ROGC complex has a unique configuration as it uses off-gases from RIL’s two refineries at Jamnagar as feedstock. This innovative approach of integration with refineries provides a sustainable cost advantage, making ROGC competitive with respect to crackers in Middle East and North America which have a feedstock cost advantage. Ethylene from ROGC is used in downstream plants to produce MEG (750 ktpa), LLDPE (550 ktpa) and LDPE (400 ktpa). Similarly, propylene from the complex is processed at the existing PP plants at Jamnagar complex.
Earlier, in June 2017, RIL completed a project on expanding paraxylene production. As a result, the launch of a new unit with 3 trains, RIL paraxylene (PX) production capacities reached 4.3 MMtpa and the company became world’s second largest producer of PX with about 11% of global production.
The expansion of PX and MEG production allowed RIL to strengthen its polyester value chain, providing its own feed for PTA production. Currently, RIL is one of the five largest global producers of PTA with a total production capacity of 5 MMtpa, 4.4 MMtpa of which are located in India. This was achieved due to the launch in 2015 of two new PTA plants with total capacity of 2.3 MMtpa in Dahej.
All of these projects fit perfectly with the vision ‘Make in India’, proclaimed by India’s Prime Minister Narendra Modi.
What does Russia have to do with it? The facts are that back in February 2012, RIL and the Russian petrochemical holding SIBUR created a joint venture - Reliance Sibur Elastomers Private Limited (RSEPL), under which the construction of a butyl rubber (IIR) and halogenated butyl rubber (HIIR) production facility at Jamnagar with a world scale capacity of 120 ktpa is underway. The plant will use technology developed by Russian specialists and owned by SIBUR.
RSEPL products will allow replacing imported analogues, thus also supporting the implementation of ‘Make in India’ initiative. The completion of construction work on the production of IIR is expected in December 2018.
Nayara Energy Limited (formerly Essar Oil Limited)
On the subject of refining cooperation between India and Russia, it is impossible to ignore Nayara Energy Limited (formerly known as Essar Oil Limited) which includes the Vadinar refinery.
In August 2017, the Russian oil and gas giant Rosneft closed a $3.9 billion transaction to buy 49% of the Indian refiner. Thus, according to Rosneft, “a platform has been created for the further development of international trading: entering the premium markets of the Asia-Pacific region and Southeast Asia”. Another 49% was acquired by Rosneft partners - global commodity trading and logistics giant, Trafigura and Russia's UCP Investment Group. The total amount of the transaction was $ 12.9 billion, which makes it the largest in the history of the Indian refining industry.
Back in 2013, plans were announced to double the capacity of the refinery and to build additional plants for the production of petrochemical products. However, in September 2018, Nayara Energy announced that the new management is reviewing expansion plans. Now in the development of the refinery, the company focuses on low cost projects with low payback period: CCR unit expansion, new SRU and SWS units, naphtha hydrotreater and isomerization unit revamps.
Nevertheless, the strategic position of the refinery and the growing demand for petrochemical products in both India and the Asia-Pacific region as a whole create favorable prerequisites for expansion of the Vadinar refinery and its integration with petrochemicals facilities.
To find out more about modern petrochemical technologies, please don't miss EPC’s Middle East Technology Forum for Refining & Petrochemicals - ME-TECH taking place February 26-28, 2019 in Abu-Dhabi.