India’s OMCs on a spree to add refining capacity

In order to meet India’s fuel demand which is set to reach 400-450 (million tonnes per annum (MTPA) by 2040, from the current 249 MTPA, India’s Oil Marketing Companies (OMCs) are busy adding refining capacities. IOC, BPCL and HPCL together are investing around Rs 2 lakh crore [$27 billion] to increase their refining capacities from 249 MTPA to 298 MTPA and double their petrochemical capacities to over six million tonnes by 2025].

IOC is increasing its capacity by 25 MTPA to 106 MTPA by 2023-24. IOC currently has 11 refineries, and is increasing capacity by 26.5 MTPA to 107 MTPA by 2025-26. Capacity of its Koyali refinery in Gujarat will go up from 13.7 MTPA to 18 MTPA post-expansion, and capacity at Panipat refinery in Haryana will increase to 25 MTPA from 15 MTPA. A new 9-MTPA plant is being built at its subsidiary — Chennai Petroleum Corp. Ltd.

At its five-year-old Paradip refinery, built at an investment of over Rs 34,555 crore, a new Rs 5,654-crore mono ethylene glycol (MEG) plant is coming up, which will make IOC a major producer of polyester fibres. A similar Rs 5,251-crore petrochem plant is coming up at its Gujarat refinery, which will help reduce the country’s dependence on butyl acrylate — a key ingredient for polyester and plastics. Expansions are also underway at its Guwahati and Barauni refineries.

The refinery expansions, costing over $13 billion, or over Rs 1lakh crore, are slated to be commissioned within the next four-five years. BPCL has 35.30 MTPA of refining capacity – 14% of India’s total capacity and 23% of the domestic fuel market – across three plants in Mumbai, Kochi and Bina in Madhya Pradesh. The third major PSU oil refiner, HPCL, is increasing its crude oil refining capacity by 17.7 MTPA, with about 4.1 MTPA of petrochemical capacity by 2024. Its current refining capacity is around 27 MTPA, including in joint ventures, which will increase to around 45 MTPA by 2024, says Chairman and Managing Director Mukesh Kumar Surana. The company is raising capacity from 7.5 MTPA to 9.5 MTPA at its Mumbai refinery, and from 8.3 MTPA to 15 MTPA in Visakhapatnam. A new greenfield refinery-cum-petrochemical complex at Pachpadra in Barmer district of Rajasthan will add another 9 MTPA.

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