State-run Hindustan Petroleum Corporation (HPCL) will soon begin seeking petroleum products from Reliance Industries, Essar Oil and Mangalore Refinery and Petrochemicals Ltd, after it shuts down half the capacity of its refinery here for upgradation.
HPCL’s Mumbai refinery has a yearly capacity of 6.5 million tonnes. The company plans to shut half of this for two months after this monsoon, for a revamp.
“We wish to upgrade one of the two crude distillation units (CDUs) to increase energy efficiency and enable the refinery to process a wider range of crude oil grades,” said a senior executive. The upgrade could cost Rs 150 crore.
Hence, HPCL would need to buy petroleum products to feed retail outlets. “We have decided to approach standalone refiners to meet the shortage,” said the executive. He said, if need be, HPCL may also look at sourcing petroleum products from the nine-million tonne per annum HPCL-Mittal Energy (HMEL) refinery at Bhatinda, Punjab.
“Mechanical completion of the refinery is over. The unit will start processing crude oil by July and products will be in the market by August-September,” chairman and managing director Subir Roy Choudhury had said last month.
HPCL and Singapore-based Mittal Energy Investment, an LN Mittal Group company, own 49 per cent each in HMEL. The refinery is being built for Rs 18,919 crore. Financial institutions hold the remaining two per cent.
After upgradation of the Mumbai refinery, its capacity will rise to seven million tonnes per annum. Also, while it presently processes only low-sulphur Mumbai High crude, it would be able to also refine high-sulphur crude.
The company had last year upgraded the refinery’s first CDU. During this year, it expects liquefied petroleum gas production from the refinery to go up by at least 20 per cent at 800,000 tonnes per year and petrol production to up by 10 per cent, at 3.2 million tonnes per year.
This April, it had also installed a new fluidised catalytic cracking unit at the Mumbai refinery, for Rs 900 crore.
