Mangalore Refinery and Petrochemicals Ltd (MRPL) processed eight new crude oils in 2020-21.
In its annual report for the fiscal, the company said the risk of disruption in crude flows is relieved by multiple sourcing options. In the petroleum supply chain, risk is also dependent on the country from which crude is imported.
“To reduce dependence on select countries, your company has been continuously diversifying. Eight new types of crudes were processed during the year,” it said.
MRPL meets its crude oil requirement from various national oil companies of exporting countries on term basis and from open market on spot basis.
During 2020-21, the company procured 11.615 million tonnes (mt) of crude oil. Of this, 9.125 mt was imported and the balance was sourced indigenously from Bombay High, Ravva and Mangala of ONGC and Cairn India.
Crude oil was imported from Kuwait Petroleum Corporation, Saudi Aramco, Abu Dhabi National Oil Company and SOMO.
To meet the Low Sulphur Heavy Stock (LSHS) requirement and shortfall in term crude requirement, MRPL also imported crude oil (0.744 mt) through spot tender during the year.
New crude oils processed during 2020-21 included Nemba (Angola), Mars (US), Bakken (US), Umm Lulu (UAE), Akpo (Nigeria), WTI Midland (US), Girassol (Angola), and Poseidon (US).
Covid impact
MRPL said the performance of the company was severely impacted by the Covid pandemic.
There was near complete destruction in demand for transportation fuels as lockdown was imposed at the beginning of 2020-21. Demand of ATF dropped to near zero levels and motor spirit and high-speed diesel also dropped significantly.
Export demand was also low as many parts of the world were already under lockdown. However, domestic LPG and polypropylene (for manufacture of PPEs) continued to be in demand.
These factors resulted in shutting down of certain units while still keeping certain units in operation so as to supply essential fuels and raw materials to the country. Sustaining of operations was carried out through timely decisions including crude diversion to ISPRL and storage of diesel product in shipping vessel.
Although sales of road transportation fuels were present to some extent, aviation fuel sales had completely stopped until July 2020. The refinery had to weather this situation by swelling diesel pool. Against this backdrop of low demand and depressed cracks, it was prudent for the company to operate at lower capacity. Consequently, the refinery capacity utilisation stood at only 60 per cent in the first quarter, it said.
The benchmark GRM (Singapore, Platts Coking-FCC-Hydrockraker) was minus $0.44 a barrel for the April-September of 2020-21 period. During the same period, MRPL’s operating GRM stood at $1.55 a barrel.
It said that the demand for products picked up as the situation reverted to near normal, and the refinery utilization increased. The average capacity utilization was 65 per cent for the first nine months of 2020-21. The capacity utilization reached 100 per cent in January 2021, and continued to remain at 100 per cent for the remainder of the year, it said.
Desalination plant
Mentioning that river water has been the mainstay of refinery’s water requirements since beginning, the annual report said less rainfall in certain years during the last decade and a burgeoning city population have made the company vulnerable to water supply disruptions during summer. This has affected the asset utilization and the revenues of the organization.
To overcome this situation, a desalination plant is being set up at an installed capacity of 6 MGD (million gallons a day). The desalination plant was slated for completion in the third quarter of 2020-21. However, due to the onset of pandemic, the works were impacted and the plant is now expected to be completed in August, it added.