Barmer refinery & petrochem hub may begin processing crude next month

Mechanical completion of the project remains at 82%, commissioning to begin in March

With pre-commissioning of multiple units already being done, Hindustan Petroleum Corporation Ltd (HPCL)’s upcoming 9 million metric tonnes per annum (MMTPA) capacity refinery in Rajasthan's Barmer may begin processing crude oil in the first month of 2025, official sources said. However, while mechanical completion of the entire petrochemical complex stands at 82 per cent, the plan to double capacity within the first 12 months is on schedule, they added.

 

"Work on the refining units have been completed. Production testing will begin in January. Commissioning activities will take place from March onwards," a highly placed source said. The refinery will have a total of 29 process units, including a 4.8 MMTPA vacuum distillation unit, and 1.8 MMTPA naphtha hydrotreater unit, and these units are at different stages of completion.

 

Announced in 2013, India’s largest greenfield, integrated refinery and petrochemical complex, the Rajasthan Refinery Project (RRP), has seen the deadline being extended multiple times. The Paradip Refinery, operated by state-run Indian Oil Corporation (IOC), was the last standalone refinery commissioned in India in 2016 with an installed annual capacity of 15 million tonnes (MT). Since then, many refiners have pursued expansion projects, but HPCL Rajasthan Refinery Limited (HRRL) will be the first standalone refinery to be developed. 

 

The refinery will produce more than 2.4 MT of petrochemicals. It is also set to house the world’s largest unit for polypropylene, a common thermoplastic, and swing unit for polyethylene, to make more than 30 different polymer grades, and produce BS-VI grade petrol and diesel.

 

The complex will operate at 75 per cent-80 per cent of capacity in the first year as various units get commissioned, officials said. The refinery is designed to run with over 83 per cent of imported medium-grade crude and the remaining being domestic crude, with Russian Urals grade crude being a favourite choice, S&P Global Commodity Insights believes.

 

"The refinery will try to diversify its crude basket for better security as future tightening of Russian barrels cannot be ruled out. The Arabian and Basrah grades are next in the top three crude types that the refinery will use,” Abhishek Ranjan, South Asia oil research lead at S&P Global Commodity Insights, said. HPCL also wants to cater to oil produced at the nearby Mangala oilfield operated by Cairn in the district, given that it has a dedicated pipeline to the same. 

 

Ups and downs

 

Construction of RRP is being overseen by HRRL, a joint venture between HPCL and the Rajasthan government, incorporated in 2013. While HPCL owns 74 per cent of the equity in HRRL, the state government, which owns the rest 26 per cent stake, has repeatedly pointed out spiralling cost overruns and delays with the project.

 

Touted back then as the single-biggest investment at one location in the country so far, the project had a new deadline of 2022. HRRL had then also stated that the project will be mechanically completed within four years from the last date of receipt of all statutory approvals. "One of the main components of the project — the nine main refinery units and four main petrochemical units — has taken more time to construct than earlier estimated due to the impact of the pandemic," an official said.

 

With an eye to India's fast-growing appetite for oil, the Centre is working to raise the total crude refining capacity in the country to 450 MMTPA, from the current 250 MMTPA.