Mangalore Refinery and Petrochemicals Ltd (MRPL) is readying plans to invest Rs 11,000 crore to raise refining capacity to 25 mt instead of the previously planned 21 mt as part of its ambitious target of clocking Rs 5,000 crore profit by 2022.
The company is also looking at scaling up its petrochemical production capacity to clock larger margins, MRPL Managing Director H Kumar told PTI here.
"We have asked Engineers India Ltd (EIL) to do a feasibility study for expansion of our refining capacity from the present 15 million tonnes (mt). Previously, we were targeting 21 mt, but now, we are exploring if 25 mt can be done," he said.
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MRPL, a subsidiary of the state-owned Oil and Natural Gas Corporation (ONGC), is ready to produce Euro-VI fuel and the planned expansion is part of its Vision 2022 with a target of Rs 5,000 crore net profit and local sales of 5 mt.
It had reported a net profit of Rs 1,148.16 crore on a turnover of Rs 39,647.44 crore in 2015-16.
"The expansion is subject to availability of land. A 1,050 acres of land parcel adjacent to our refinery has been identified and the acquisition process will now start," he said.
According to Kumar, EIL will study if the crude distillation unit (CDU) of 6 mt or 10 mt should be set up. "We would prefer 10 mt. Going by the thumb rule of Rs 1,100 crore per tonne, the expansion would cost Rs 11,000 crore," he said.
The expansion is seen as a major margin driver, potentially doubling the company's profit per barrel. It is expected to help the company process cheaper, heavier crudes into high-value products like diesel, liquefied petroleum gas and propylene.
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