MRPL likely to turn off Mangalore refinery plan

Mangalore Refinery and Petrochemicals Ltd (MRPL) may not go ahead with its plan for a new 15 million tonnes per annum (mtpa) refinery in Mangalore, as the surge in refinery capacity under construction has put a question mark over the feasibility of the project.

"A new refinery at Mangalore may not be feasible in the context of the refining capacity that is already coming up in the country. We are reviewing the new refinery which was part of our master plan," said a senior MRPL executive.

MRPL, which is 71.62 per cent owned by Oil and Natural Gas Corporation, already operates a 9.69 mtpa refinery at Mangalore which capacity is being expanded to 15 mtpa (million tonnes per annum). The expansion work is likely to be completed by the first quarter of 2011.

The refinery is operating above its capacity and processing 12 mtpa of crude oil.

Petrochem focus
MRPL is instead focussing its attention on developing the area around the existing refinery as a petrochemicals hub, with the setting up of aromatics and olefin complexes.

"We are setting up an aromatics unit with the capacity to produce 9,20,000 tonnes per annum (tpa) of paraxylene and 1,40,000 tpa of benzene. We will soon commission a detailed feasibility report for an olefin complex. The report will be submitted in six months," the MRPL executive said.

ONGC and MRPL have set up a special purpose vehicle "� ONGC Mangalore Petrochemical Limited (OMPL) "� to develop the petrochemicals hub.

Earlier this month OMPL invited expressions of interest from Indian and foreign companies to set up purified terephthalic acid (PTA) and other downstream facilities using paraxylene (for PTA) and benzene as feedstock.

Questions over Kakinada
MRPL and ONGC are also studying the possibility of a refinery at Kakinada in Andhra Pradesh. Initial studies conducted by ONGC have found that the refinery would be economically unviable, as a refinery already exists nearby in Vishakapatnam, which is also expanding capacity.

The country has a refining capacity of 159 mtpa and this will be expanded to 241 mtpa by 2011-12.

This includes Reliance Industries' 27 mtpa greenfield refinery coming up at Jamnagar and Essar Oil's new refinery at Vadinar, also in Gujarat.

Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Indian Oil are also expanding capacity at existing refineries as well as setting up new refineries in various parts of the country.