Bharat Petroleum Corp Ltd (BPCL) plans to invest about USD 4 billion for more than doubling capacity of its Bina oil refinery in Madhya Pradesh.
BPCL, India's second-biggest state refiner, will invest Rs 3,500 crore in raising capacity of Bina refinery to 7.8 million tonnes a year from current 6 million tonnes by 2018, its Chairman and Managing Director S Varadarajan said here.
It will further invest Rs 18,000-20,000 crore in raising capacity to 15 million tonnes in the next 5-6 years.
Oman Oil Company (OOC), which has a minority stake in the Bina refinery, is not participating in the expansion as of now, he said.
OOC holds 26 per cent stake in the Bharat Oman Refineries (BORL) - the firm that built the refinery. The firm had in 2009 paid a 50 per cent premium for a re-entry into the Rs 11,397-crore Bina refinery project.
The project was originally conceived through a joint venture company, BORL but the OOC did not contribute equity beyond the initial Rs 75 crore.
The Omanese oil major came back to pick up 26 per cent stake in the project for an additional Rs 1,220 crore.
The BORL was formed as an equal joint venture company way back in 1993. However, following inordinate delays in the implementation of the project, OOC froze its investment in the company at Rs 75 crore for a two per cent equity stake.
BPCL, which holds 49 per cent stake in the project, provided the unbridged portion of the Rs 4,000-crore equity in form of loan. The state-run firm got its loan back once OOC made payments for its 26 per cent share.
The remaining 25 per cent is with financial institutions.
BPCL also operates a 12 million tonnes a year refinery at Mumbai and 9.5 million tonnes Kochi unit. It also has majority stakes in the 3 million tonnes Numaligarh refinery in Assam.
He said BPCL is expanding and upgrading its Kochi refinery in Kerala to process high sulphur crudes by 2016.
Kochi refinery capacity is being raised to 15.5 million tonnes from current 9.5 million tonnes.
Crude grades with a high sulphur content are cheaper, and refineries that have installed speciality secondary units to process them can lower feed costs and increase their margins.
Also, Numaligarh refinery capacity is being planned to be raised to 9 million tonnes, he added.
