Published On:June 11 2024
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"BPCL Plans to Establish Rs 50,000 Crore Refinery in State Ownership"

"BPCL Plans to Establish Rs 50,000 Crore Refinery in State Ownership"

BPCL Eyes Rs 50,000 Crore Investment for New Refinery Expansion

Bharat Petroleum Corporation Limited (BPCL) is gearing up for a significant expansion with plans to establish a new refinery with a capacity of 12 million metric tonnes per annum (MMTPA) in the country. As reported by the Economic Times, the state-run oil marketing giant is set to invest approximately Rs 50,000 crore into this ambitious project and is currently scouting locations in three states: Andhra Pradesh, Uttar Pradesh, and Gujarat.

An official quoted in the report stated, "The BPCL is planning another refinery either on the east coast or on the west coast as India needs more refineries to meet the increasing fuel demand. Talks are at a preliminary stage." Uttar Pradesh is also under consideration as a potential location for the new refinery.

This move comes on the heels of BPCL's Chairman G Krishnakumar's announcement last month, outlining the company's vision to elevate its refining capacity to 45 MMTPA by FY29. Currently, BPCL operates three refineries in Mumbai, Kochi, and Bina (Madhya Pradesh), collectively capable of refining around 36 MMTPA.

The investment strategy of BPCL extends beyond refinery expansion. The company plans to inject approximately Rs 1.7 trillion into its core businesses over the next five years, with a significant portion earmarked for refineries, petrochemicals, pipeline projects, and fuel marketing. Of this, Rs 75,000 crore is slated for refineries and petrochemical projects, Rs 8,000 crore for pipeline ventures, and more than Rs 20,000 crore for its marketing endeavors.

The decision to pursue a new refinery comes in the wake of the shelving of a previous plan to construct a 60 MMTPA integrated refinery and petrochemical complex on the west coast in Maharashtra. Initially proposed in 2015, the project, aimed at meeting the nation's escalating demand for fuel and petrochemicals, did not materialize due to environmental concerns and local opposition.

Meanwhile, India's fuel demand is on an upward trajectory, reaching a record high of approximately 233.276 million tonnes in FY24, up from 223.021 million tonnes in FY23. To meet this burgeoning demand, India is poised to expand its refining capacity by nearly 80%, from the current 252 MMTPA to about 450 MMTPA by 2030, with a focus on establishing smaller petroleum refineries to mitigate challenges related to land acquisition and regulatory clearances.

Despite the global trend of refinery closures, driven by various factors including environmental regulations and evolving energy dynamics, India sees an opportunity to emerge as a refining hub for the world. The anticipated robust fuel demand in the coming years underscores the strategic significance of BPCL's ambitious expansion plans.

BS





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