Mangalore Refinery and Petrochemicals Ltd (MRPL) expects to complete its ongoing expansion at 10 per cent less than the estimated cost of approximately Rs 15,000 crore.
The savings, if achieved, may earn the Rs 44,000-crore company a distinct position among public sector enterprises, which are often criticised for project cost overrun.
The company is undertaking the expansion of nameplate refining capacity by 3 million tonnes to 15 mt at Rs 12,160 crore, coupled with a Rs 1,806-crore polypropylene unit.
The upgrade of the crude unloading facility (SPM) at Rs 1,044 crore is expected to be completed by September-October 2012. The unloading facility is being upgraded to accommodate very large carriers.
“We expect to save Rs 1,500 crore on the capacity expansion,” MRPL Managing Director, Mr U. K. Basu, told Business Line . Shares of the company closed at Rs 56.85, marginally up from the previous closing on the BSE on Thursday.
Savings on OMPL
According to Mr Basu, substantial savings would also be achieved in commissioning of the Rs 5,750-crore aromatic complex at Mangalore. Implemented by ONGC Mangalore Petrochemicals Ltd (OMPL) — a JV of parent ONGC and MRPL — 70 per cent of the project is already commissioned. Full commissioning is expected at the end of this year.
Lower Iran crude
Meanwhile, the expansion of refining capacity would enable MRPL to process approximately 16 mt crude including over 3 mt of cheaper, very heavy and acidic crude, thereby bringing home higher value addition.
MRPL was originally designed to process high quantities of light Iranian crude. However, the payment fiasco has forced the company to look for alternatives.
Having processed 7.3 mt of Iranian crude, of the total requirement of 11-12 mt in 2010-11, the company had reduced its share of such supplies to 6.2 mt in 2011-12. “In 2012-13 we will process 5 mt of Iranian crude,” Mr Basu said.