BPCL Seeks Land Acquisition Approval from Andhra Pradesh Government for Refinery.

State-run Bharat Petroleum Corporation Limited (BPCL) has initiated discussions with the Andhra Pradesh government for land acquisition to establish a refinery-cum-petrochemicals complex along the state’s coastline. The company requires approximately 6,000 acres for the project, which is expected to play a significant role in the region's industrial growth.

"We have almost identified the land and approached the Andhra Pradesh government for acquisition. The process will start soon," said Vetsa Ramakrishna Gupta, Director - Finance, BPCL, during an analyst call recently.

Pre-Project Activities Underway

BPCL’s board has approved ₹6,100 crore for pre-project activities, primarily focused on land acquisition and development. "This includes field studies and detailed project reports (DPRs), which will take six to nine months to complete. By December 2025, we expect to finalize the project numbers and reach the final investment decision (FID) stage," Gupta added.

Refinery Configuration and Investment

BPCL is considering two refinery configurations with capacities of 9 million tonnes (mt) and 10 mt, integrating significant petrochemical production. Gupta noted, "For a 9 mt refining capacity, we are looking at 3.8-4 mt of petrochemicals, with around 3-3.5 mt allocated for petroleum products."

The estimated capital expenditure for the project is ₹95,000 crore. Gupta highlighted that the Andhra Pradesh government has offered substantial capital subsidies, further enhancing the project’s feasibility. BPCL is also in talks to identify a joint venture partner for the refinery complex.

Timeline and Integration

The project is expected to be commissioned 48 months after the FID is finalized. BPCL plans to align the refinery's development with the ongoing expansion of its Bina refinery.

Crude Supply Challenges

Discussing crude oil procurement, Gupta stated that BPCL’s shipments from Russia in March 2025 would decrease by 20% due to U.S. sanctions. "Russian supplies accounted for 31% of our Q3 FY25 cargoes but are expected to drop temporarily," he noted. However, the company is sourcing sufficient crude from West Asia and the U.S. to maintain stable operations.

BPCL’s refinery-cum-petrochemicals complex in Andhra Pradesh marks a significant step in bolstering India’s energy infrastructure, with a focus on meeting domestic demand and supporting the country’s industrial growth.

HBL