Hindustan Petroleum Corp Ltd (HPCL) has launched Vision 2030, a new set of objectives to be achieved over the next 15 years.
While this will include aggressive numbers for refining capacity, retail outlets and pipelines, there will also be an added focus on renewable energy options keeping in mind environment regulations in the future.
Vision 2030 is the brainchild of S Roy Choudhury, Chairman and Managing Director, who retires at the end of this month. The idea is to ensure that HPCL stays ahead of the curve in a competitive environment, where private players such as Reliance Industries, Essar and Shell will also be part of the fuel retail arena.
It is perhaps keeping this in mind that the company has roped in international consultant McKinsey to study and recommend better integration of its operations right from refining to marketing. At present, these are largely silo functions, but going forward, greater synergies will become imperative for front and back-end operations. The savings on costs are expected to be “quite substantial” as a result.
Choudhury, who took charge in August 2010, is upbeat about the Barmer refinery in Rajasthan, which is scheduled for commissioning over the next three years. “It’s going to be a critical project for the north and will enhance HPCL’s presence in the region,” he told Business Line . The Rajasthan refinery will kick off with a capacity of 9 million tonnes (mt), but this can be comfortably doubled to 18 mt.
The other critical pillar for the north is the 9-mt Bhatinda refinery, a joint venture between HPCL and the Lakshmi Mittal group. Its capacity, likewise, can be enhanced to 18 mt with the added prospects of supplying products to Pakistan.
All it takes is building a pipeline from Bhatinda to Lahore for supply of petrol and diesel, says Choudhury. In reality, though, this will need a formal trade pact to be formalised between India and Pakistan. In the meantime, the Bhatinda and Barmer refineries will cater to demand for products in Punjab, Rajasthan, Delhi, Uttar Pradesh and Bihar.
From Choudhury’s point of view, the Barmer refinery is as relevant since it will have an integrated facility for petrochemicals. “It is definitely an interesting business stream for the future,” he says.
Capacity expansionHPCL will also increase the capacity of its Vizag refinery to 15 mt and this will be its single largest facility by 2017. Along with Mumbai, Bhatinda and Barmer, the company hopes to have 40 mt in place by that time. The next phase of expansion will see Bhatinda and Barmer double capacities, while work on a new west coast refinery could also kick off. All this is part of Vision 2030, where HPCL is expected to have 70 mt of refining capacity in its kitty.
Choudhury is pleased that his tenure saw the company strengthen its infrastructure base, comprising pipelines, terminals and retail outlets. The recent tie-up with the Shapoorji Pallonji group for an LNG terminal in Gujarat is expected to kick-start the process of a larger road map for gas distribution across the country.
On March 1, Nishi Vasudeva takes over from Choudhury and will become the first woman to be at the helm of affairs in a public sector oil company.