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Bharat Petroleum Corporation is scripting an expansion and modernisation plan for its four refineries across the country. The investments for the next 3-4 years, along with petrochemicals, will be upwards of Rs 25,000 crore.
As part of its downstream focus, BPCL has earmarked Rs 7,000 crore for new pipelines which will ensure cost-effective transport of products. An additional Rs 6,000 crore will go towards creation of infrastructure for gas distribution.
“We have had huge gas finds in Mozambique and hope to become a significant player in its marketing as well. The idea is to make gas available for use in India and our contribution is going to be very significant,” R.K. Singh, Chairman and Managing Director, told Business Line .
For the moment, BPCL’s top priority is its refinery expansions which will help satiate the growing demand for products in the country. This will include its Mumbai facility, the oldest in its kitty, which began operations way back in 1955. “We are trying to improve efficiency of this refinery by replacing the age-old plants with new ones. This low-cost upgradation will boost production and make the facility more energy-efficient,” Singh said.
Other facilities
As a result, the 12-million-tonne refinery will see an overall utilisation of up to 120 per cent (translating into an output of 14 mt). More importantly, it will continue to be relevant in the years to come.
Another expansion proposal involves Numaligarh Refinery in Assam, which BPCL acquired from IBP in the mid-1990s. At three mt, it is the biggest facility in the North-East. BPCL is now looking at increasing its capacity to nine mt but the big issues here involve crude availability and product evacuation.
Paradip in Orissa (where IndianOil is readying its refinery) is the nearest port, and Singh said BPCL could examine the option of importing crude from here and transporting it via pipeline to Numaligarh. Similarly, another pipeline can be put in place to carry products from the refinery to eastern Uttar Pradesh.
The recently commissioned Bina refinery in Madhya Pradesh will see a low-cost expansion and all that needs to be done is upgrading the size of the equipment without any new unit.
“We can easily increase capacity from six to nine mt at an investment of Rs 2,000 crore,” Singh said.
Biggest expansion
Oman Oil, BPCL’s equity partner in the Bina refinery, is bullish on this expansion which will cater to the needs of north and central India. However, any further capacity increase hinges on water availability in the region.
Kochi Refinery, which BPCL acquired from the Government a decade ago, will see the biggest capacity expansion from 9.5 to 15.5 mt over the next three years. This will be accompanied by addition of a coker facility to improve efficiency.
It will involve an expenditure of Rs 15,000 crore which will see Kochi emerge the largest refinery in the BPCL stable along with a petrochemicals complex.
Singh said the company is adopting a new concept of outsourcing in Kochi to keep costs in check.
“I am confident Mumbai and Kochi will see better profitability once these projects are completed and good refinery margins are assured in the future,” he said.
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