 "BPCL Bina Refinery")
Bharat Petroleum Corporation Limited (BPCL) has appointed SBI Capital Markets to secure Rs 31,000 crore loan for its ambitious expansion project at the Bina refinery complex in Madhya Pradesh, according to a report by The Economic Times. This capital will be used for planned capital expenditures aimed at significantly enhancing the refinery’s capacity and capabilities.
The expansion project is a strategic move to address global refining capacity shortages that have emerged due to the shutdown of unviable refineries post Covid-19.
In addition to increasing crude processing capacity, the capital expenditure plan includes the establishment of an ethane cracker unit. This unit will break down natural gas to produce ethylene, a key industrial chemical used in plastics manufacturing. This development is expected to stimulate downstream industries in plastics and packaging in Madhya Pradesh.
Total cost of Bina refinery expansion project
The total project cost is estimated at just under Rs 50,000 crore. The loan, which is expected to be syndicated among several local banks and financial institutions, will have a tenor of 15 years. The remainder of the project cost will be covered by BPCL through equity infusions.
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The Bina refinery expansion was announced in May last year, with the foundation stone laid by Prime Minister Narendra Modi in September. This initiative aims to bolster BPCL’s presence in India’s northeastern petrochemical sector by ensuring the production, marketing, and efficient distribution of quality products.
BPCL, in which the government holds a 52.98 per cent stake, plans to increase the refinery's processing capacity from the current 7.8 million metric tonnes per annum (MTPA) to 12 MTPA.
Future prospects of Bina refinery
The Bina refinery was initially formed as a joint venture between BPCL and Oman Oil in 1994. It became a wholly owned subsidiary of BPCL in 2021. The ongoing expansion plans will position BPCL to better meet domestic and international demand for refined products.
The refinery expansion will also contribute to the local economy by offering livelihoods to people living in the vicinity of the refinery. The project is currently assessing potential locations in Andhra Pradesh, Uttar Pradesh, and Gujarat for additional facilities.
Government plans for Bina refinery
Petroleum Minister Hardeep Singh Puri highlighted the importance of the ethane cracker unit at the foundation stone-laying ceremony, stating that it would encourage the development of downstream industries in the region. This project aligns with India’s broader strategy to boost industrial growth and infrastructure development.
By securing this loan, BPCL aims to strengthen its operational capabilities and maintain a competitive edge in the global refining market. The completion of this project will mark a significant milestone in India's efforts to expand its refining capacity and enhance energy security.
The Bina refinery expansion project is expected to play a crucial role in India’s petrochemical sector, promising economic benefits and increased industrial activity.
