India set to become refining hub

The policy direction of the petroleum ministry seeks to make India a refining hub in the coming decades, according to S C Tripathi, secretary, Union ministry of petroleum and natural gas.

Speaking to the media on the sidelines of the inauguration of the 13th refinery technology meet, Tripathi said that apart from the expansion of the HPCL's Vizag refinery in the state from 7.5 mmtpa (million metric tonne per annum) to 15 mmtpa, three more refinery projects "" HPCL's Bhatinda unit in Punjab, BPCL's greenfield project at Beena in Madhya Pradesh and IOCL unit at Paradip in Orissa "" accounting for a total of 27 mmtpa were in the pipeline. India's total installed refining capacity as of April 2005 stands at about 127 mmtpa.

Tripathi described the theme of the conference "maximising hydrocarbon value chain" as apt considering the country's energy security and sustaining refining business keeping in view the rising prices of crude oil, depleting reserves, increased use of inferior sour crude oil, environmental stipulations, geo-political factors and globalisation. Though the country is self sufficient in refining and surplus in most of the petroleum products, there is huge shortage of crude oil. About 75 per cent of the country's crude oil demand is met through imports and the country is extremely vulnerable to various factors affecting the hydrocarbon sector, he said.

Oil refining, petrochemicals and gas processing in India has considerably increased in the recent past, Tripathi said and added that the thrust was now on optimisation of the refining business to sustain growth and derive maximum benefit. The thrust on refining today is maximising value addition from affordable feedstock processing, he said. He also said that the government of India had commissioned a study by Shell Global Solutions on the working of the refineries whose results would be made available by the end of the year.

The surplus refining capacity along with a growing demand for petroleum products have sustained healthy refining margins in our region, he said and at the same time wondered how long the refineries world over could sustain the dream run currently being maintained due to a general tightening of regional and global refining balances and above average economic growth.

Ashok Sinha, chairman and managing director, Bharat Petroleum Corporation Limited, speaking of the global refining sector said, "Currently, the demand is increasing at 1.75 per cent while the refining capacity is increasing at 0.7 per cent thereby reducing the spare capacity."

He said that the spare global refining capacity, which reached its peak at about 35 per cent in early 1980s now stands below 5 per cent and that the spare capacity was available in Western Europe and Japan while the major shortfall for markets was in US, China and Southeast Asia.

The three-day conference is being attended by over 380 delegates and will be held in 10 technical sessions and three poster sessions. The conference is being organised by Centre for High Technology (CHT) in association with Bharat Petroleum Corporation Limited (BPCL), which is celebrating golden jubilee of its Mumbai refinery.