New refinery projects to raise capacity to 210 mt

With a slew of greenfield refinery projects expected to be set up in the country, the crude oil refining capacity will surge to 210 million tonne (mt) per year by 2010. At present, the country's refining capacity is 127.37 mt from 18 refineries.

Over six greenfield refinery projects are at different stages of development, while two capacity expansion projects are under way. Reliance Industries (RIL) will be a major contributor through its arm Reliance Petroleum, with a refining capacity of 60 mt in four years, industry experts said.

"Apart from RIL, Nagarjuna Oil Corporation, Essar Oil, Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOC) are in the fray to build-up refineries. Both IOC and RIL have started expansion in their existing refineries as well," Deepak Mahurkar, principal consultant - oil and gas, PricewaterhouseCoopers, said.

RIL has the third largest single location refinery in the world at Jamnagar with a capacity of 33 million tonne per annum (mtpa) and accounts for 26 per cent of the country's refining capacity.

With the new project it plans to increase capacity to 60 mtpa. Reliance Petroleum has announced its pubic issue to fund a new project in Jamnagar. The total project cost will be $6 billion.

Nagarjuna is a new entrant into the petroleum sector with their refinery at Cuddalore in Tamil Nadu. It will have a capacity of 6 mtpa and the commercial production is expected to start in 2008.

The investment for the project is Rs 4,000 crore. The refinery will have the flexibility to process different types of crude oil and produce multiple grade products.

BPCL's 6 mtpa refinery at Bina is estimated to cost around Rs 9,100 crore. The Madhya Pradesh government has announced 15-year tax deferment to the project.

The company will invest close to Rs 1,800 crore towards 50 per cent equity capital. Of the rest, Oman Oil will hold 3 per cent, 22 per cent will be offered to a strategic partner, and the remaining 25 per cent is scheduled to be offered to the public.

After almost a decade since it was planned, HPCL is set to finalise its plans on setting up the 9 million tonne Guru Gobind Singh Oil Refinery at Bhatinda in Punjab.

The refinery is expected to be commissioned in four years and the project may undergo cost escalation from its initial 1998 estimate of about Rs 9,806 crore.

IOC's proposed refinery at Paradip will have 15 mtpa capacity. The petrochemical-cum-oil refinery will be completed by 2009-10 at an estimated cost of Rs 20,000 crore. IOC accounts for over 40 per cent of the national refinery capacity. IOC's ongoing expansion project at Panipat refinery will increase production to 15 mtpa by 2009.