Rs 13,000-cr expansion plan for BPCL’s Numaligarh refinery; new 1338-km pipeline to come up

BPCL CMD Varadarajan

COUNTRY'S second biggest state-run refiner Bharat Petroleum Corporation Ltd (BPCL) is all set to spend around Rs 13,000 crore for expansion of its Numaligarh Refinery Limited (NRL) in Assam by 2017-18. The state owned refiner plans to expand the Numaligarh refinery to nine million tonnes from the current...
three million tonnes, company chairman and managing director S Varadarajan said. "We are still at the drawing-board stage for the expansion. We need tax concessions both from the central and the state governments to make the expansion economically viable," he said.
Numaligarh refinery was designed to process locally available resources from North Eastern oilfields and the refinery has been operating at less than its capacity due to falling crude oil output in the region which has low sulphur content. The refinery now plans to expand its refining capacity by setting up new process units capable of processing high sulphur imported crude oil.
High sulphur crude oil is comparatively cheaper and is expected to have a positive impact on its margins.
After the expansion of the unit, BPCL now plans to process imported crude oil. Numaligarh refinery operated at only 83 percent of its three million-ton-a-year capacity in 2012-13. It earned a net profit of Rs 144.26 crore on sales of Rs 8,752.88 crore in the year.
A 1,338-km, six million-tonne-a-year pipeline will be built from Dhamra Port in Odisha to Numaligarh to cater to the expanded refining capacity.
The CMD said that the techno-economic feasibility study for the expansion project has already been completed and Engineers India Ltd (EIL) is now preparing detailed feasibility report (DFR). He also said that the route survey for the crude oil pipeline has been completed and DFR preparation is in progress.
BPCL also plans to raise capacity of its Bina refinery in Madhya Pradesh to eight million tonnes from current six million tonnes by December 2016.
BPCL, which also operates a 12 million tonnes refinery at Mumbai, is also raising capacity at its Kochi refinery in Kerala by 6 million tonnes to 15.5 million tonnes by 2015-16. India currently has a refining capacity of 217 million tonnes.
Set up in 1993, NRL is one of the most technologically advanced and environment friendly refineries in the country. BPCL is the major share holder with 61.65 percent of NRL’s paid up equity capital. The other shareholders are government of Assam (12.35 percent) and Oil India Limited (26 percent). Though majority of the refinery products are marketed through BPCL and other oil companies, NRL markets a small amount of its products through its own network of retail outlets called ‘Energy Stations’.